Download PROMOTORA Y OPERADORA DE INFRAESTRUCTURA

PROMOTORA Y OPERADORA DE INFRAESTRUCTURA, S.A.B. DE C.V.
Bosque de Cidros No. 173, Col. Bosques de las Lomas
Delegación Cuajimalpa,
05120 México, Distrito Federal
The corporate capital of Promotora y Operadora de Infraestructura, S.A.B. de C.V. (“PINFRA”, the
“Company” or the “Issuer”), is represented by 428’086,358 shares registered in the National Securities
Registry (“RNV”) of the National Banking and Securities Commission (“CNBV”), of which (i)
380’123,523 are Ordinary Shares, Class I, nominative and with full voting rights, without stated par
value, and (ii) 47’962,835 are Series L Shares, nominative, with limited voting rights, without stated par
value.
Listing key word at the Bolsa Mexicana de Valores, S.A.B. de C.V. (“BMV”): “PINFRA”
The inscription of shares representing the corporate capital of PINFRA in the RNV does not imply
certification of the quality of such securities, the creditworthiness of the Issuer or the accuracy or veracity
of the information contained in this Annual Report, nor does it validate the acts, as the case may be, they
had made in violation of applicable laws.
Annual Report filed in accordance with the general provisions applicable to Issuers and other
participants in the market for the period ended on December 31, 2014
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1)
GLOSSARY OF TERMS AND DEFINITIONS.
Unless the context indicates otherwise, the terms shall have the meaning adscribed to the below:
Term
Meaning
2003 México-Toluca Issuance Trust
means the trust created under the irrevocable trust
agreement (Contrato de Fideicomiso Irrevocable) dated
September 19, 2003, among PACSA as settlor,
BANCOMEXT as trustee, and MBIA as insurer, in
connection with the issuance of preferred and
subordinated
securities
(certificados
bursátiles
fiduciarios) in an aggregate principal amount of 1,458
million UDIs.
2004 Peñón-Texcoco Issuance
means the December 17, 2004 issuance by the PeñónTexcoco Issuance Trust of 18,500,000 securities trading
on the BMV under the symbol “CPACCB 04,” in an
aggregate principal amount of Ps.1,850 million.
2005 Tenango-Ixtapan de la Sal Issuance
means the October 4, 2005 issuance by the TenangoIxtapan de la Sal Issuance Trust of 1,949,812 securities
trading on the BMV under the symbol “TENANCB
05U,” in an aggregate principal amount of 194.9 million
UDIs.
2006 Atlixco-Jantetelco Issuance”
means the September 14, 2006 issuance by the AtlixcoJantetelco Issuance Trust of 1,438,418 securities trading
on the BMV under the symbol “CONCECB 06U,” in an
aggregate principal amount of 143.8 million UDIs.
2006 México-Toluca Issuance
means the April 7, 2006 issuance by the México-Toluca
Issuance Trust of 11,137,473 preferred securities trading
on the BMV under the symbol “PADEIM 06U” and
3,646,559 subordinated securities trading on the BMV
under the symbol “PADEIM 06-2U,” in an aggregate
principal amount of 1,511.9 million UDIs.
2006 Santa Ana-Altar Issuance
means the December 14, 2006 issuance by the Santa
Ana-Altar Issuance Trust of 2,117,395 debt securities
trading on the BMV under the symbol “ZONALCB
06U,” in an aggregate principal amount of 211.7 million
UDIs, together with the issuance by the Santa Ana-Altar
Issuance Trust of 846,958 debt securities trading on the
BMV under the symbol “ZONALCB 06-2U,” in an
aggregate principal amount of 84.7 million UDIs and
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the issuance by the Santa Ana-Altar Issuance Trust of
1,279,437 debt securities trading on the BMV under the
symbol “ZONALCB 06-3U,” in an aggregate principal
amount of 127.0 million UDIs.
2009 México-Toluca Issuance
means the March 19, 2009 issuance by the MéxicoToluca Issuance Trust of 2,415,386 subordinated
securities trading on the BMV under the symbol
“PADEIM 09-U” in an aggregate principal amount of
241.5 million UDIs.
Altamira Port Terminal Concession
means the concession granted by the Mexican Federal
Government through the SCT to API to operate the
multiple uses terminal of the Altamira Port in
Tamaulipas, as assigned by API to IPM through the
Altamira Port Assignment Agreement.
Altamira Port Assignment Agreement
means the assignment agreement dated April 19, 1996
among API, IPM, Grupo Tribasa and Tribade whereby
API assigned to IPM its rights and obligations under the
Altamira Port Terminal Concession.
APIA
means Administración Portuaria Integral de Altamira,
S.A. de C.V., the original concessionaire of the Altamira
Port Terminal Concession.
ARKA
means Casa de Bolsa Arka, S.A. de C.V.
Armería-Manzanillo Toll Road Concession
means the concession granted by the Mexican Federal
Government through the SCT to PAPSA (currently
VCCPacífico, due to PAPSA’s spin-off) to construct,
operate and maintain approximately 37 km of the
Armería-Manzanillo toll road that runs from Colima to
Manzanillo.
Armería-Manzanillo Trust
means the trust created under the trust agreement dated
April 1, 2010, between PAPSA as settlor and
beneficiary and CIBANCO, S.A. Institución de Banca
Múltiple, División Fiduciaria, as trustee, in connection
with the operation and management of all payments
related to the Armería-Manzanillo Toll Road
Concession.
ATISA
means our subsidiary, Autopista Tenango Ixtapan de la
Sal, S.A. de C.V.
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Altipac Plant
means our asphalt and its aggregates production quarry
located on the Mexico City-Puebla toll road.
Apizaco-Huauchinango Stretch
means the approximately 63 km toll road that runs in
the State of Puebla.
Apizaco-Huauchinango,
Virreyes-Teziutlán
Atlixcáyotl Toll Road Concession
and
means the concession granted by the Government of the
State of Puebla, to PAPSA (currently VCCPacífico, due
to PAPSA’s spin-off), to exploit, operate and maintain
the toll roads that run through the State of Puebla.
Atlixco-Jantetelco Issuance Trust
means the trust created under the irrevocable
management and source of payment trust agreement
(Contrato
de
Fideicomiso
Irrevocable
de
Administración y Fuente de Pago) dated September 15,
2006, among CONCEMEX (with respect to the AtlixcoSan Bartolo-Cohuecán Stretch) and RCA (with respect
to the Morelos Stretch), as settlors, Banco Invex, S.A.,
Institución de Banca Múltiple, Invex Grupo Financiero,
Fiduciario, as trustee, and Monex, as agent of the note
holders, in connection with the issuance of securities
(certificados bursátiles fiduciarios) in an aggregate
principal amount of 143.8 million UDIs.
Atlixco-Jantetelco Toll Road Concession
means the concession granted by the Government of the
State of Puebla, through the SCT, to CONCEMEX, to
construct, operate and maintain (i) the Atlixco-San
Bartolo-Cohuecán Stretch and (ii) the CohuecánActeopan Stretch.
Atlixco-San Bartolo-Cohuecán Stretch
means the approximately 38 km of a two lane asphalt
toll road that runs from Atlixco to San Bartolo in the
State of Puebla.
AUCAL
means Autopistas Concesionadas del Altiplano, S.A. de
C.V., the original concessionaire of the Tlaxcala-San
Martín Texmelucan Toll Road Concession.
Average Daily Income
means total revenue for a period divided by the
corresponding number of days in such period.
Average Daily Traffic by Vehicle Equivalents or
ADTV
means the daily traffic equivalent which results from
dividing the cumulative Equivalent Traffic for a period
by the corresponding number of days in that period.
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Average Toll Fee Charged for Vehicle Equivalents
means the daily revenue from toll fees divided by the
Equivalent Traffic.
BANCOMEXT
means Banco Nacional de Comercio Exterior, S.N.C.
Institución de Banca de Desarrollo (Mexican National
Foreign Trade Bank).
BANOBRAS
means Banco Nacional de Obras y Servicios Públicos,
S.N.C., Institución de Banca de Desarrollo (Mexican
National Works and Public Services Bank), a
governmental bank that finances infrastructure projects.
BMV
means the Bolsa Mexicana de Valores, S.A.B. de C.V.
(Mexican Stock Exchange).
Brownfield Project
means an existing project that has been fully constructed
or which requires additional construction or partial
reconstruction.
CAGR
means the compound annual growth rate.
CAPUFE
means Caminos y Puentes Federales de Ingresos y
Servicios Conexos, the governmental authority that
currently operates and maintains a substantial portion of
the toll roads owned by the Mexican Federal
Government.
CEPSA
means Concesionaria Ecatepec – Pirámides, S.A. de
C.V., our former subsidiary that was merged with
PAPSA.
Cetes
means Certificados de la Tesorería (Mexican Treasury
Certificates).
CNA
means the Comisión Nacional del Agua (Mexican
National Water Commission).
CNBV’
means the Comisión Nacional Bancaria y de Valores
(Mexican
National
Banking
and
Securities
Commission).
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Cohuecán-Acteopan Stretch
means approximately 10.6 km of a two lane toll road
that runs from Cohuecán to Acteopan in the State of
Puebla.
CONCEMEX
means our subsidiary, Concemex, S.A. de C.V.
Concesionaria de Autopistas de Michoacán
means Concesionaria de Autopistas de Michoacán, S.A.
de C.V. (a joint venture in which we hold a 25.2%
interest), the concessionaire under the PátzcuaroUruapan-Lázaro Cárdenas Toll Road Concession.
Concession for the Elevated Viaduct of the MexicoPuebla Toll Road
means the concession granted to LEP by the
Government of Puebla by means of Carreteras de Cuota
Puebla for the construction, exploitation, operation,
conservation and maintenance of the Elevated Viaduct
over the Mexico-Puebla federal highway, from KM
115+000 to KM 128+300.
CPAC
means our subsidiary, Concesionaria Pac, S.A. de C.V.
Deposit Agreement
means the deposit agreement dated September 29, 1993,
between the Company with Bank of New York Mellon
(previously New York Bank), the latter acting as
depositary.
EBITDA
means operating
amortization.
Ecatepec-Peñón Stretch
means approximately 18 km of a four lane asphalt toll
road that runs through the State of Mexico.
Elevated Viaduct of the Mexico-Puebla Toll Road
Assignment Agreement
means the assignment agreement dated August 20, 2014
by means of which OHL assigned to LEP its rights
under the Concession for the Elevated Viaduct of the
Mexico-Puebla Toll Road.
Equivalent Traffic
is a measure we use to calculate traffic on our toll roads,
and means the total number of vehicles that traveled on
a given toll road, calculated, based on the type of
vehicle, by dividing the total amount charged per type
of vehicle in each toll booth by the related toll fee
charged on the related toll road.
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income
plus
depreciation
and
FARAC
means the Fideicomiso de Apoyo para el Rescate de
Autopistas Concesionadas (Trust for the Support of the
Rescue of the Concessioned Roads).
FONADIN
means the Fondo Nacional de Infraestructura (National
Infrastructure Fund) formerly known as Fondo de
Inversión en Infraestructura or FINFRA.
GCI
means our subsidiary, Grupo Corporativo Interestatal, S.A.
de C.V.
GDP
means gross domestic product.
Infrastructure Projects
means all concession- or materials for sale-related
projects in which we participate, whether individually or
jointly with other parties.
Indeval
means S.D. Indeval Institución para el Depósito de
Valores, S.A. de C.V.
INPC
means the Índice Nacional de Precios al Consumidor
(National Consumer Price Index).
IPM
means our subsidiary,
Mexicana, S.A. de C.V.
LEP
means our subsidiary Libramiento Elevado de Puebla,
S.A. de C.V.
LMV
means the Ley del Mercado de Valores (Mexican
Securities Market Law).
MBIA
means MBIA Insurance Corporation.
MC
means our subsidiary, Mexicana de Cales, S.A. de C.V.
Mexico
means the United Mexican States.
Mexican Federal Government
means the federal government of the United Mexican
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Infraestructura
Portuaria
States.
México-Toluca Issuance Trust
means the trust created under the irrevocable trust agreement
(Contrato de Fideicomiso Irrevocable) dated April 3,
2006, among PACSA, as settlor, Nafin, as trustee,
MBIA, as insurer, and Monex, as the agent of the
noteholders (representante común), in connection with
the issuance of securities (certificados bursátiles
fiduciarios) under the PADEIM program in an
authorized aggregate principal amount of Ps.25.0
billion.
México-Toluca Toll Road Concession
means the concession granted by the Mexican Federal
Government, through the SCT, to PACSA for the
construction,
operation
and
maintenance
of
approximately 19 km of a four lane asphalt toll road that
runs from Constituyentes and Reforma in Mexico City,
to La Venta in the State of Mexico as well as the
Marquesa-Lerma Stretch.
Monarca
means our subsidiary, Concesionaria Monarca, S.A. de
C.V.
Morelia-Aeropuerto Toll Road Concession
means the concession granted by the Government of the
State of Michoacán, to Purépecha, to construct, operate
and maintain approximately 23 km of a two lane asphalt
toll road that runs through the State of Michoacán.
Morelia-Aeropuerto Trust
means the trust created under the irrevocable
administration and source of payment trust agreement
(Contrato
de
Fideicomiso
Irrevocable
de
Administración y Fuente de Pago), dated February 9,
2007, between Purépecha, as settlor and beneficiary,
and HSBC México, S.A. Institución de Banca Múltiple,
Grupo Financiero HSBC, División Fiduciaria, as
trustee (as substituted by a substitution agreement dated
September 30, 2009, among the parties to the
irrevocable administration and source of payment trust
agreement and Banco Inbursa, S.A. Institución de Banca
Múltiple, Grupo Financiero Inbursa) in connection with
the operation and management of all payments related
to the Morelia-Aeropuerto Toll Road Concession.
Morelos Stretch
means approximately 6.5 km of a two lane concrete toll
road that runs from Huazulco to Jantetelco in the State
of Morelos, which concession was granted by the
Government of the State of Morelos to RCA and is
operated by Opervite.
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Nafin
means Nacional Financiera, S.N.C., Institución de
Banca de Desarrollo, a Mexican development banking
institution.
NYSE
means the New York Stock Exchange.
Official Gazette
means the Diario Oficial de la Federación.
Opervite
means our subsidiary, Opervite, S.A. de C.V.
Ordinary Shares
means the Class I, ordinary shares with full voting
rights, with no par value, which represent the fixed
portion of our capital stock and currently trade on the
BMV under the symbol “PINFRA”.
PACSA
means our subsidiary, Promotora y Administradora de
Carreteras, S.A. de C.V.
PADEIM
means the Programa AAA para el Desarrollo de
Infraestructura en México (AAA Program for the
Development of Infrastructure in Mexico), an
authorized Ps.25.0 billion program for the issuance of
securities (certificados bursátiles fiduciarios).
PAPSA
means our subsidiary, Promotora de Autopistas del
Pacífico, S.A. de C.V.
Patzcuaro-Uruapan-Lázaro Cárdenas
Concession or Paquete Michoacan
Toll
Road
means the concession granted by the Mexican Federal
Government through the SCT to Concesionaria de
Autopistas de Michoacán to construct, operate and
maintain (i) the Morelia and Uruapan beltways (25.20
km) and (ii) the Pátzcuaro-Uruapan-Lázaro Cárdenas
toll road (272 km) and modernization work associated
therewith for a term of 30 years. We own 25.2% of the
Paquete Michoacan therefore we do not consolidate
such concession in our income statement.
Peñaloza Family
means Messrs. David Peñaloza Sandoval, María
Adriana Alanís González, Adriana Graciela Peñaloza
Alanís and/or David Peñaloza Alanís.
Peñón-Texcoco Assignment Agreement
means the assignment agreement dated May 18, 1993
between the Government of the State of Mexico and
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CPAC, whereby the State of Mexico assigned to CPAC
the Peñón-Texcoco Toll Road Concession.
Peñón-Texcoco Issuance Trust
means the trust created under the irrevocable trust
agreement (Contrato de Fideicomiso Irrevocable) dated
December 17, 2004, among CPAC, as settlor, Banco
Inbursa, S.A. Institución de Banca Múltiple, Grupo
Financiero Inbursa, as trustee, and ARKA, as agent of
the noteholders, in connection with the issuance of
securities (certificados bursátiles fiduciarios) in an
authorized aggregate principal amount of Ps.1,850
million.
Peñón-Texcoco Toll Road Concession
means the concession granted by the Federal
Government in favor of the Government of the State of
Mexico, and assigned to CPAC, to repair the existing
stretch of road and construct, operate and maintain
approximately 15.6 km of a four lane asphalt toll road
that runs through the State of Mexico.
Pesos or Ps.
means Mexican pesos.
PFIC
means passive foreign investment company.
PINFRA, Company or Issuer
means both Promotora y Operadora de Infraestructura,
S.A.B. de C.V. individually and Promotora y Operadora
de Infraestructura, S.A.B. de C.V. jointly with its
subsidiaries.
Pinseco
means our subsidiary, Pinfra Sector Construcción, S.A.
de C.V.
Pirámides-Ecatepec-Peñón Toll Road Concession
means the concession granted by the Mexican Federal
Government through the SCT, to CEPSA (currently
VCCPAPSA), to construct, operate and maintain the (i)
Pirámides-Ecatepec Stretch and (ii) Ecatepec-Peñón
Stretch.
Pirámides-Ecatepec-Peñón Trust
means the trust created under the trust agreement dated
April 1, 2010, between PAPSA, as settlor, and
CIBANCO, S.A. Institución de Banca Múltiple, División
Fiduciaria, as trustee, in connection with the operation
and management of the toll collections from the
Pirámides-Ecatepec-Peñón Toll Road Concession.
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Pirámides-Ecatepec Stretch
means the approximately 22.2 km of a four lane asphalt
toll road that runs through Mexico City and the State of
Mexico.
Principal Shareholders
means Messrs. David Peñaloza Sandoval, María
Adriana Alanís González, Adriana Graciela Peñaloza
Alanís and David Peñaloza Alanís.
Purépecha
means our 50% equity method
Concesionaria Purépecha, S.A. de C.V.
RCA
means Región Central de Autopistas, S.A. de C.V., the
current concessionaire of the Morelos Stretch.
Real Annual Rate of Return
means our annual rate of return adjusted to give effect to
inflation.
Release of Rights of Way
refers to the liberación de derecho de vía, which means
the legal authorization to use land to construct and
operate a particular concession project that was
previously occupied, obtained by payment of an
indemnity in the event of expropriation or payment of
the purchase price.
RNV
means the Mexican Registro Nacional de Valores
(National Securities Registry) maintained by the CNBV.
San Luis Río Colorado-Estación Doctor Toll Road
Concession
means the concession granted by the Government of the
State of Sonora, through its Assets and Concessions
State Commission (Comisión Estatal de Bienes y
Concesiones) to CPAC, to construct, operate and
maintain approximately 48.2 km of a two lane asphalt
toll road that runs through San Luis Río Colorado,
Sonora.
San Luis Río Colorado-Estación Doctor Trust
means the trust created under the investment,
administration and source of payment trust agreement
(Contrato de Fideicomiso de Inversión, Administración
y Fuente de Pago), dated September 8, 2008, between
CPAC, as settlor and beneficiary, and Banco Invex,
S.A., Institución de Banca Múltiple, Invex Grupo
Financiero, Fiduciario, as trustee, in connection with the
operation and management of all payments from the San
Luis Río Colorado-Estación Doctor Toll Road
Concession.
GA #100224v5
investment,
Santa Ana-Altar Issuance Trust
means the trust created under the irrevocable management
and source of payment trust agreement (Contrato de
Fideicomiso Irrevocable de Administración y Fuente de
Pago), dated August 30, 2006, among Zonalta, as
settlor, Banco Inbursa, S.A. Institución de Banca
Múltiple, Grupo Financiero Inbursa, as trustee, and
Monex, as agent of the noteholders, in connection with
the issuance of securities (certificados bursátiles
fiduciarios) in an authorized aggregate principal amount
of Ps.1.6 billion.
Santa Ana-Altar Toll Road Concession
means the concession granted by the Mexican Federal
Government in favor of the Government of the State of
Sonora, and assigned to Zonalta, to carry any necessary
construction needed to modernize 10.5km of the Santa
Ana-Altar stretch and to widen the Altar-Piquito stretch
as well as to operate and maintain approximately 73 km
of a two lane asphalt and two lane concrete of the
federal toll road in Sonora, México.
SCT
means the Secretaría de Comunicaciones y Transportes
(Transportation and Communications Ministry).
SEMARNAT
means Secretaría de Medio Ambiente y Recursos
Naturales (Ministry of the Environment and Natural
Resources).
SHCP
means Secretaría de Hacienda y Crédito Público
(Ministry of Finance and Public Credit).
SIFIC
means Sistema de Información Financiera y Contable de
las Emisoras (Financial and Accounting System of
Issuers).
State Governments
means the collective governments of the individual
states of the United Mexican States.
TC
means our subsidiary, Tribasa Construcciones, S.A. de
C.V.
Tenango-Ixtapan de la Sal Issuance Trust
means the trust created under the amendment to an
irrevocable investment, administration and source of
payment trust agreement (Contrato de Fideicomiso
Irrevocable de Inversión, Administración y Fuente de
Pago), dated October 3, 2005, among our subsidiaries
Tribasa, Triciesa and Atisa, as settlors, Scotiabank
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Inverlat, S.A., Institución de Banca Múltiple, Grupo
Financiero Scotiabank Inverlat, División Fiduciaria, as
trustee, in connection with the issuance of securities
(certificados bursátiles fiduciarios) in an authorized
aggregate principal amount of Ps.700.0 million.
Tenango-Ixtapan de la Sal Toll Road Concession
means the concession granted by the Government of the
State of Mexico, to ATISA, to construct the tranche La
Finca-Ixtapan de la Sal as well as to operate and
maintain approximately 40.15 km of a two lane asphalt
toll road.
TEU
means a twenty-foot equivalent unit.
TIIE
means Tasa de Interés Interbancaria de Equilibrio
(Interbank Equilibrium Interest Rate).
Tlaxcala-San
Agreement
Martín
Texmelucan
Tlaxcala-San
Concession
Martín
Texmelucan
Assignment
Toll
Road
means the assignment agreement dated November 19,
2010 between AUCAL and PAPSA, whereby AUCAL
assigned to PAPSA its rights to Tlaxcala-San Martín
Texmelucan Toll Road Concession along with certain
other rights derived from a lawsuit filed by AUCAL
against the Government of the State of Tlaxcala.
means the concession granted by the Mexican Federal
Government through the SCT in favor of AUCAL, and
assigned to PAPSA (currently VCCPacífico, due to
PAPSA’s spin-off) to construct, operate and maintain
approximately 25.5 km of a four lane asphalt toll road
that connects San Martín Texmelucan in Puebla with the
City of Tlaxcala.
Tlaxcala-San Martín Texmelucan Trust
means the trust created under the irrevocable trust
agreement (Contrato de Fideicomiso Irrevocable), dated
November 19, 2010, among PAPSA, as settlor and
beneficiary, and Banco Invex, S.A. Institución de Banca
Múltiple, Invex Grupo Financiero, as trustee, in
connection with the operation and management of all
payments from the Tlaxcala-San Martín Texmelucan
Toll Road Concession.
Tlaxcala-Puebla Toll Road Concession
means the concession granted by the Government of the
State of Tlaxcala to CONCEMEX, to construct, operate
and maintain approximately 16 km of a two lane asphalt
toll road connecting Puebla with Tlaxcala.
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Toll Road Concessions
means the toll road concessions constructed and
operated by us under concessions granted to our
subsidiaries.
UDI
means Unidades de Inversión (Mexican Investment
Units) which are tied to the inflation rate.
U.S. dollars, USD dollars or U.S.$
mean United States dollars.
VAT
means value-added tax (Impuesto al Valor Agregado or
IVA).
VCCPacífico
means our subsidiary Vías de Comunicación del Centro
y Pacífico, S.A. de C.V.
VCCPAPSA
means our subsidiary Vías
Carreteras PAPSA, S.A. de C.V.
Virreyes-Teziutlán
means the approximately 60.9 km of the asphalt toll road
located in the State of Puebla.
Zitácuaro-Lengua de Vaca Toll Road Concession
means the concession granted by the Government of the
State of Michoacán, to Monarca to construct, operate
and maintain approximately 11.8 km of a two lane
asphalt state toll road that runs through the State of
Michoacán and the State of México.
Zitácuaro-Lengua de Vaca Trust
means the trust created under the irrevocable,
administration and source of payment trust agreement
(Contrato
de
Fideicomiso
Irrevocable
de
Administración y Fuente de Pago) dated October 30,
2007, between Monarca, as settlor and beneficiary, and
HSBC México, S.A. Institución de Banca Múltiple,
Grupo Financiero HSBC, División Fiduciaria, as
trustee (as substituted by a substitution agreement dated
October 5, 2009 among the parties to the trust
agreement and Banco Invex, S.A., Institución de Banca
Múltiple, Invex Grupo Financiero, Fiduciario), in
connection with the operation and management of all
payments from the Zitácuaro-Lengua de Vaca Toll
Road Concession.
Zonalta
means our subsidiary, Concesionaria Zonalta, S.A. de
C.V.
GA #100224v5
Concesionadas
de
2)
EXECUTIVE SUMMARY
This Annual Report contains forward-looking statements that reflect our plans, estimates and beliefs and
involve risks, uncertainties and assumptions. Our actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to,
those discussed below and elsewhere in this Annual Report, particularly in “Risk Factors.” In addition to the other
information in this offering memorandum, investors should consider carefully the following discussion and the
information set forth under “Risk Factors” before investing in our Shares.
a)
The Company
General Overview
Promotora y Operadora de Infraestructura, S.A.B. de C.V. is one of the leading operators of infrastructure
concessions in Mexico based on the number of concessions in our portfolio. The Company holds 17 concessions
consisting of 16 highway concessions and oneport terminal. The highway concessions include the operation of 25 toll
roads (17 of which are operational and 8 are under construction) and a toll bridge. In addition to the operation of
infrastructure concessions, we are engaged in (i) the supervision of construction, operation and maintenance of
highways; and (ii) the production of asphalt and other supplies related to road construction. These activities’ main
purpose is to serve our own portfolio of concessions, in order to minimize costs, aiming to increase the return of our
investment. We had consolidated revenues of Ps.4.5 billion (U.S. $351.8 million) for 2012, and Ps.5.8 billion for 2013
and Ps 6.9 billion for 2014.
Our transportation infrastructure concessions division represented 68.6% of our consolidated revenues for
2014. Out of this 68.6%, 84.6% derived from the operation of highway and bridge concessions, while the remaining
15.4% derived from the port concession. Our 25 toll roads and one bridge have an aggregate extension of 989 km and
are strategically located principally in areas with high density population, with a total aggregate average daily vehicle
traffic of 160,989 up to December of 2014. During 2014 over 58.8 million vehicles registered tolls on our 17
operational toll roads that were operating that year and the José López Portillo bridge. We have a nationwide footprint
with concessions located in the Federal District and the states of Mexico, Morelos, Puebla, Tlaxcala, Michoacán,
Colima, Sonora, and Tamaulipas. . Our concessions produce stable revenues and predictable cash flows, which, as we
have reduced our debt, provide resources for the development of new infrastructure projects. Additionally, we have
been able to extend several concession terms through the widening and improvement of existing roads. As of
December 31, 2014, the average term of our portfolio of concessions was 33 years.
Our port concession is located in Altamira, Tamaulipas where we operate a multi-use port terminal with a
capacity to manage approximately 500,000 TEUs per year. The port is located in an area of approximately 269,470
m2, with 600 meters of water front, including an option to extend for an additional 350 meters. During 2014, we
managed 187,379 TEUs, 543,047 tons of steel, 29,383 of general cargo and 1,521 cars.
Our construction and maintenance division provides services primarily to our concessions, and in some
limited instances, to third parties. Through this business division we render construction services for our new
infrastructure developments, as well as maintenance services for our concessions which are already fully operational.
This business division represented 24.5% of our consolidated revenues for 2014. The construction division provides
services to the Company in the development and construction of its concessions and, sometimes, to third parties. The
works built and by means of which revenues derive from for this division were the Reforma-Constituyentes
distributor, the Acopilco distributor and expansion of the Altar-Pitiquito, Tlaxcala-Puebla and Peñon Ecatepec
highways.
Through our construction materials and supplies division, we operate one of the largest asphalt production
facilities in the metropolitan area of Mexico City. We produce asphalt materials used for the paving of highways and
suburban roads. Our asphalt production facility has a capacity of approximately 1.4 million tons. In 2014, we
produced 360,614 tons of asphalt mix. Additionally, we operate other production facilities dedicated to the
construction of central barriers for highways and other prefabricated concrete elements used in urbanization and road
construction. Our construction materials and supplies division represented 6.9% of our consolidated revenues.
GA #100224v5
Concessions
The following table sets forth key data of the concessions we individually or jointly operate:
Concession
Securitized Toll Road
Concessions:
Year
granted
Initiated
operatio
ns
Expiration
1. México-Toluca.............................
a. MMéxico-Marquesa
1989
1990
2049
b. MMarquesa Lerma
2013
—
2049
2. Peñón-Texcoco ............................
1993
3. Tenango-Ixtapan de la
Sal ...............................................
1994
4. Santa Ana-Altar ..........................
2006(3)
5. Atlixco-Jantetelco(4) .....................
a. Atlixco-San Bartolo
Cohuecán Stretch ..................
1995
Non-securitized Toll Road
Concessions:
b. Cohuecán-Acteopan
Stretch ...................................
2008
6. Pirámides-Ecatepec(5)
Peñón ....................................... —
a. Pirámides-Ecatepec
Stretch ...................................
1991
b. Ecatepec-Peñón
Stretch ...................................
2010
1994
2053
Location
Mexico
City/State of
Mexico
Mexico City/
State of
Mexico
Mexico City/
State of
Mexico
State of
Mexico
State of
Mexico
Sonora
Puebla
1995
2006
2054
2035
2003
2036
Puebla
2008
2036
Puebla
State of
Mexico
State of
Mexico
State of
Mexico
—
—
1991
(6)
2051
—
2051(6)
7. Armería-Manzanillo ....................
1990
1991
(7)
Colima
8. Zitácuaro-Lengua de
Vaca ............................................
2007
2007
2037
Michoacán
9. Morelia-Aeropuerto.....................
2007
10.San Luis Río ColoradoEstación Doctor ..........................
2008
2008
2037
Michoacán
2009
2038
Sonora
11.Tlaxcala-Puebla ..........................
2008
--
12.Tlaxcala-San Martín
Texmelucan .................................
1990(10)
13. ´Puebla Toll Roads(15)
2010
2041
Tlaxcala
Puebla
2012
2012
2042
Puebla
a. Vía Atlixcayotl
2050
— (9) Tlaxcala/Puebla
Road
Length
(km)
Concession
revenues as
a % of total
ADTV for
revenues for
the year
the year
ended Percentage
ended
December
owned
December
31, 2014
by us
31, 2014
Concession
revenues as
a % of total
revenues
for the year
ended
December
31, 2013
100%
19
57,124
100%
20.9%
30.97%
Operational(2)
15
—
100%
—
—
16
28,730
100%
6.0%
8.97%
Operational(2)
40
5,067
100%
2.2%
3.23%%
73
3,884
100%
100%
2.7%
3.94%
Operational(2)
Operational(2)
38
3,702
100%
2.7%
3.95%
11
—
100%
—
—
Construction (2)
100%
Operational(2)
Operational(2)
—
22
20,478
100%
7.0%
10.37%
22
—
100%
—
—
37
5,815
100%
6.6%
9.13
12
2,995
100%
0.5%
0.82
Operational(2)
Construction
Operational(2)
Operational(2)
23
2,331
50%
—
—
48
435
100%
0.2%
0.55%
100%
—
—
100%
2.1%
3.25%
16
26
6,080
Operational(2)
Operational(2)
Construction
Operational(2)
Operational(2)
19
17,924
100%
3.0%
4.39
61
3,663
100%
1.8%
2.47
63
2,761
100%
1.4%
2.02
2012
2012
2042
Puebla
2012
c. Apizaco Huauchinango
14.Michoacan Toll Roads(12)............. —
a. Morelia beltway ....................
2012
b. Uruapan beltway ...................
2012
c. Patzcuaro-Uruapan
2012
toll road ................................
2012
2042
Puebla
—
—
—
—
2042
2042
Michoacán
Michoacán
Michoacán
64
25
—
—
25.2%
25.2%
—
—
—
—
—
2042
Michoacán
47
7,821
25.2%
—
—
b. Virreyes - Teziutlan
Status(1)
Operational(2)
Operational(2)
—
Construction
Construction
Operational
Operational(2)
2012
2012
2042
Michoacán
59
5,258
25.2%
—
—
e. Nueva Italia -Lázaro
2012
Cárdenas toll road ................
15. SigloXXI
2013
16. Puebla Elevated
2014
Viaduct
Other Concessions:
2012
2042
Michoacán
157
3,196
25.2%
—
—
—
2043
Morelos
62
—
51%
—
—
Construction
---
---
Puebla
13
—
49%
—
—
Construction
d. Uruapan-Nueva Italia
GA #100224v5
Construction (2)
17. Altamira Port Terminal..............
1994(13)
1996
2036
Tamaulipas
Total in km
100%
10.5%
14.6%
Operational(14)
989
______________
(1)
As of the date of this offering memorandum.
(2)
“Operational” concession, with respect to any toll road concession, is a concession where vehicular traffic exists.
(3)
This concession was originally granted by the Mexican Federal Government to the State of Sonora.
(4)
This concession was originally granted for the Atlixco-San Bartolo-Cohuecán Stretch and thereafter extended to include the Cohuecán-Acteopan Stretch.
(5)
This concession was originally granted for the Pirámides-Ecatepec Stretch and thereafter extended to include the Ecatepec-Peñón Stretch.
(6)
The original term of this concession will expire on January 24, 2021 and, if necessary, may be extended for up to an additional 30-year period to allow PAPSA to
recover the total equity invested, and the corresponding return on such investment, in (i) the Pirámides-Ecatepec Stretch; (ii) the construction of the Ecatepec-Peñon
Stretch; (iii) the acquisition of the Tlaxcala-San Martín Texmelucan toll road; and (iv) any new investments that may be necessary pursuant to the Pirámides-EcatepecPeñon Toll Road Concession.
(7)
The original term of this concession will expire on November 8, 2020 and, if necessary, may be extended for up to an additional 30-year period to allow PAPSA to
recover the total equity invested, and the corresponding return on such investment, in (i) improvements made on the Armería-Manzanillo toll road and (ii) any new
investments that may be necessary pursuant to the Armería-Manzanillo Toll Road Concession.
(8)
The results of operations of this concession are not consolidated with our consolidated results of operations because we own only 50% of Purépecha, the concessionaire
under this concession. Our share of revenues from Purépecha is calculated in our consolidated financial statements using the equity method.
(9)
The term of this concession is 30 years from the date in which the Tlaxcala-Puebla toll road initiates operations.
(10)
The original concessionaire was AUCAL, who assigned this concession to PAPSA on November 19, 2010.
(11)
Operations under this concession were initiated on November 23, 2010.
(12)
The results of operations of this concession are not consolidated with our consolidated results of operations because we own only 25.2% of Concesionaria de
Autopistas de Michoacán, the concessionaire under this concession. Our share of revenues from Concesionaria de Autopistas de Michoacán is calculated in our
consolidated financial statements using the equity method. Concesionaria de Autopistas de Michoacán began operating this concession on March 31, 2012.
(13)
The original concessionaire was API, who assigned this concession to IPM on April 19, 2006.
(14)
“Operational” concession, with respect to the Altamira Port Terminal, is a concession where maritime traffic exists.
Our Competitive Strengths
Efficient business model
We believe that our principal strength as an operator of transportation infrastructure concessions is our
efficient and streamlined business model of strategically identifying, investing in, and efficiently operating
infrastructure projects to generate consistent and predictable cash flows. We develop independent concessions that
provide us with what we believe is an attractive rate of return and cash flow generation.
In recent years, we have generated cash flow sufficient to satisfy our investment needs. We have historically
demonstrated the ability to finance growth through long-term peso securitization transactions of our toll road
concessions. We have carried out some securitizations that have contributed significant resources to our balance sheet
which, together with our free cash flow generation, have allowed us to acquire and develop new infrastructure
projects. We successfully increased the number of its concessions from 8 in 2006 to 17 in 2014. This growth has
maintained our company as one of the principal owners and operators of concessions in Mexico.
Attractive and predictable cash flow generation
Our operations have demonstrated over the last several years steady and predictable cash flows. During the
three-year period ending December 31, 2013, our consolidated revenues increased at a CAGR of 24%. We reported
consolidated revenues of Ps.6.9 billion for 2014, Ps.5.8 billion for 2013 and Ps.4.5 billion for 2012, with an EBITDA
margin of 59.7% for 2014, 63.8% for 2013 and 67.1% for 2012.
In our transportation infrastructure concessions division, the 17 operational toll roads have shown steady
daily traffic flows, with 64.7 million vehicles in transit in 2014 and 58.9 million vehicles in transit in 2013. In
addition, these concessions have an average term of 33 years. The port concession presents a similarly steady
parameter, with the port terminal at Altamira moved 287,379 TEUs in 2014, 181,532 TEUs in 2013 and 174,942 in
2012. The remaining term of this concession is 21 years.
The construction materials and supplies division has also reported stable cash flows, representing revenues
of Ps. 474.1 million for 2014 and Ps.410 million for 2013. Finally, the construction division (which include the effects
of the IFRIC 12) reported revenues of Ps.1,679.2 million for 2014, Ps.1,017 million for 2013 and Ps.370 million for
2012.
In addition to the above, we have achieved consistent levels of operating expenses and maintenance costs for
our concessions. Cash revenues, coupled with disciplined levels of operating expenses and maintenance costs have
enabled us to generate strong cash flows and obtain high visibility of earnings and returns to our investments.
GA #100224v5
Geographical diversification of our concessions’ portfolio combined with long remaining concession terms
and complementary lines of business
We believe the geographical diversification of our concessions portfolio allows us to mitigate political,
socioeconomic and environmental risks. Our concessions are located across eleven Mexican states: the Federal
District and the states of México, Morelos, Puebla, Tlaxcala, Michoacán, Colima, Sonora and Tamaulipas.
Additionally, these concessions are strategically located in high density populated regions with favorable growth
prospects in GDP terms.
Compared to other concession holders in Latin America, we hold one of the longest average terms of
concessions portfolio with 33 years as of December 31, 2014. This is a result of newly developed and acquired
concessions, as well as a management effort with the regulators of achieving early renewals or extensions of existing
concessions in exchange for widening or other capital improvement of existing roads.
We also participate in complementary lines of business such as asphalt mix and related products,
construction and maintenance of roads, and a multi-purpose port terminal concession, which represent in aggregate
42% of our consolidated revenues for 2014.
Strong financial profile and cash position
While we are continuously looking for growth opportunities to expand our business, we have maintained a
disciplined approach to our investment of capital. This has been a key strategy to build and maintain the financial
strength of our business. The strength of our balance sheet has proven to be a key differentiating factor to take
advantage of greenfield, brownfield and acquisition opportunities as they arise, even during periods of economic
volatility.
Proven track record of growth and operational efficiency even in challenging environments
We have a proven track record in operating and growing our portfolio of concessions, as well as improving
the terms of our concessions, even in challenging economic, regulatory and competitive environments. During the
period from 2006 to 2014, the number of our transportation infrastructure projects increased from eight to 27, which
today represent 25 toll roads, a port terminal and a toll bridge. For example, we were awarded the San Luis Río
Colorado-Estación Doctor toll road concession during the 2008 economic crisis. Also, in 2011 we were awarded the
Tlaxcala-Puebla toll road and the Michoacán package of concessions and the Puebla concession, in 2013, we were
awarded the concession for the Jantetelco - El Higuerón stretch of the Siglo XXI highway and the Marquesa – Lerma
stretch, for the construction of an additional 13.8 km of our existing Mexico – Toluca concession, and in 2014 we
obtained the concession for the Elevated Viaduct of the Mexico-Puebla Toll Road.
To date, the development of these concessions has been conducted within the time-frames that were
originally established in the corresponding concession titles. In addition, we have successfully worked with the
Mexican federal and state governments to extend the lives of our concessions. Nine concessions in our portfolio have
had at least one extension of their original term.
We believe that the increase in concessions awarded to us in recent years and the successful extension of our
concession terms is a reflection of our operational expertise, and experience in the transportation infrastructure
concessions sector as well as our successful track record managing complex projects.
Experienced and well integrated management team
Our senior management team has an average of 22 years of experience in the infrastructure sector
identifying, developing and operating toll roads, ports, airports and water treatment plants throughout Mexico and
Latin America. Additionally, our management team has over 20 years of experience in the financial sector, which has
helped us identify the appropriate financial structure to finance our projects, while maintaining an overall strong
financial position. As reflected in the period between 2006 and 2014, our management team has a proven track record
of winning new transportation infrastructure concessions through public bidding processes and acquisitions, and
GA #100224v5
subsequently developing these concessions through design, financing and construction. Today our management team
is focused on the sustainable growth and the efficiency standards of our concessions portfolio, in order to maximize
profitability and value creation, while keeping a solid financial position of strength.
Our Strategy
Key elements of our strategy to capitalize on our strengths and continue to grow our business
The strategies for capitalizing on our strengths, and to continue to grow our business include:
 the promotion and development of new business opportunities in collaboration with government
authorities; and
 the successful operation of our existing concessions.
We intend to continue to foster our already well-established and long term relationships with the Mexican
federal government and state governments. We interact on an ongoing basis with local and state governments, which
we believe tend to be receptive to private initiatives. This ongoing dialogue enables us to identify infrastructure needs
and anticipate and propose specific infrastructure developments in specific regions.
We believe that our in-depth understanding of the specific infrastructure needs coupled with our well
established relationship with several government authorities at various levels of seniority allow us to successfully
analyze, bid on and execute new infrastructure projects.
With respect to our existing concessions, we seek to maximize the profitability of each of our concessions in
order to create value for our shareholders through the following:

Investing in improvements to our concessions that result in additional revenues. To improve our toll
roads and make them more responsive to the needs of the communities that use them, we periodically
make improvements and capital investments in addition to those required by the concession contract.
These improvements are conducted with the approval of the relevant authorities, and often lead to
increased revenues through either increased toll rates or increased traffic or both.

Improving operating efficiency of each concession. By focusing on improving the efficiency of
our operations, we seek to maximize the profitability of our concessions measured by our cash
flow generation.

Negotiating extensions to the terms of our concessions. We extend the terms of our concessions
by negotiating reinvestments in accordance with Mexican law. When entering into new
concessions we seek to negotiate the inclusion of provisions that would potentially allow us to
extend the term in connection with future investments in order to maximize the value of our
assets.
b)
Financial information summary.
The capital stock of the Company is represented by 428’086,358 Shares registered in the RNV of the
CNBV, of which (i) 380,123,523 are Ordinary Shares, Class I, nominative and with full voting rights, without stated
par value, and (ii) 47,962,835 are Series L Shares, nominative, with limited voting rights, without stated par value.
The Company’s Shares were first listed in the BMV on September 22, 1993 under the key word “PINFRA”.
The following charts show the maximum and minimum trading prices of the Ordinary Shares in the BMV
during the following years and quarters:
For each one of the following years:
GA #100224v5
Maximum
Minimum
Average
Beginning of the Period
End of the Period
Volume
2010
$
44.70
$
26.11
$
32.52
$
29.30
$
43.90
62,606,900
2011
$
59.80
$
41.35
$
52.02
$
43.90
$
59.80
42,285,300
2012
$
86.20
$
54.48
$
64.95
$
59.80
$
86.20
82,739,600
2013
$
159.00
$
86.20
$
120.02
$
86.20
$
156.02
244,725,000
2014
$
190.68
$
150
$
175.79
$
156.02
$
177.39
168,559,100
For each one of the following quarters:
Maximum
Minimum
Average
Beginning of the Period
End of the Period
1/2015
$
182.47
$
162.71
$
171.60
$
177.39
$
162.71
Volume
39,560,100
4/2014
$
190.40
$
186.05
$
176.09
$
184.62
$
177.39
39,036,900
3/2014
$
190.68
$
171.00
$
180.24
$
173.34
$
184.62
36,804,300
2/2014
$
185.00
$
169.20
$
179.28
$
176.08
$
173.34
45,551,700
1/2014
$
179.55
$
150.00
$
167.38
$
156.02
$
176.08
54,048,632
4/2013
$
159.00
$
126.00
$
144.77
$
126.00
$
156.02
82,491,100
3/2013
$
145.45
$
118.53
$
131.40
$
119.8
$
125.78
66,706,100
2/2013
$
122.5
$
99.1
$
112.17
$
100.38
$
118.99
50,163,500
1/2013
$
99.83
$
86.20
$
90.74
$
86.20
$
99.83
45,364,300
4/2012
$
88.00
$
65.00
$
73.51
$
70.01
$
86.20
60,089,700
3/2012
$
74.5
$
62.20
$
69.12
$
63.00
$
70.33
6,386,700
2/2012
$
65.00
$
54.1
$
59.44
$
55.3
$
62.79
11,472,100
1/2012
$
59.5
$
55.21
$
57.67
$
55.5
$
55.29
3,550,000
The following charts show the maximum and minimum trading prices of the Series L Shares in the BMV
from their placement date and during the 8 following months:
Date and placement price: July 15, 2014; Ps.$172.00 (one hundred seventy two Pesos 00/100 M.N.) per Share.
Maximum
Minimum
Average
Beginning of the Period
End of the Period
Volume
July 2014 (starting
on the 15)
$
169.74
$
163.69
$
168.42
$
170
$
163
10,476,893
August 2014
$
171.9
$
161.91
$
167.61
$
163
$
169.20
5,179,814
September 2014
$
175.92
$
165.92
$
170.22
$
169.20
$
167
3,294,853
October 2014
$
171.07
$
164
$
167.62
$
167
$
170.49
2,863,048
November 2014
$
171.49
$
158.11
$
165.22
$
170.49
$
157.50
3,733,393
December 2014
$
159.65
$
146.45
$
154.29
$
157.50
$
156.88
5,476,464
January 2015
$
166.66
$
150.6
$
158.95
$
156.88
$
158.50
3,553,468
February 2015
$
165.65
$
157.68
$
160.9
$
158.50
$
159.10
2,675,696
March 2015
$
160.45
$
148.9
$
159.14
$
159.10
$
148.44
1,456,409
3)
RISK FACTORS
An investment in our Shares involves risks. You should carefully consider the risks described below as well
as the information contained in this Annual Report before making an investment decision. Our business, financial
condition and results of operations could be materially and adversely affected by any of these risks. The trading price
GA #100224v5
of our Shares and the liquidity of our Shares could decline due to any of these risks, and you may lose all or part of
your investment. The risks described below are those known to us and that we currently believe may materially affect
us. Additional risks not presently known to us or that we currently consider immaterial may also impair our business.
Our results may differ significantly from those previously reported as a result of certain factors, including
the risks faced by us, described below and in other sections of the Annual Report.
For the purposes of this section, when we state that a risk, uncertainty or problem may, could or will have an
“adverse effect” on us or “adversely affect” our business, financial condition or results of operation, we mean that
the risk, uncertainty or problem could have an adverse effect on our business, financial condition, results of
operations, cash flow, prospects, and/or the market price of our Shares, except as otherwise mentioned. You should
view similar expressions in this section as having similar meaning.
Risks Related to Our Business
Returns on our investment in certain concessions may not meet the returns estimated at the time of our
investment.
Our return on any investment in toll road concessions is derived from the traffic volume generated on such
toll road and the revenues for the toll generated by such vehicle volume. The traffic volumes, and therefore toll
revenues, are affected by a number of factors including toll rates, the quality and proximity of alternative toll-free
roads, fuel prices, taxation, environmental laws, purchasing power of consumers, seasonality of the traffic in certain
cases and general economic conditions. Due to these factors, we cannot guarantee that we will obtain the estimated
returns over our toll road concessions. Any major change in any of the above variables may adversely affect the
traffic volume and therefore the returns on our investments, our financial condition and results of operations.
Governmental entities may prematurely terminate our concessions under certain circumstances.
Our concessions are our principal assets, and we would be unable to continue the operation of a particular
Toll Road Concession without the concession right from the granting governmental authority.
The concessions are subject to recall (rescate) by the competent authority, this is the power of the granting
authority of taking possession and property of the assets under concession if, in accordance with applicable law, it
determines that it is in the public interest to do so in the event of war, disturbance of the public order or threat to
national security. We cannot, however, assure you that in the event of a recall we would receive any compensation on
a timely basis or in an amount equivalent to the value of our investment in a concession plus lost profits.
Under certain circumstances, we may obtain from the relevant governmental authority an extension of the
terms of our concessions. However, in most cases such extensions are granted at the discretion of the relevant
authorities. Therefore, we cannot assure you that the relevant governmental authorities will extend the terms of any of
our concessions. If such authorities do not extend our concessions, our business, financial condition and results of
operations may be adversely affected.
Likewise, a concession may be revoked by the relevant governmental authority for certain reasons set forth
in the relevant concession title and in applicable legislation, including the failure to comply with development,
operation and/or maintenance programs, temporary or permanent halt of our operations, exceeding the agreed upon
rates of return set forth in certain of our concessions or failing to comply with any other material term of the relevant
concession or applicable law. For a description of the rights of the relevant governmental authorities to terminate any
of our concessions, see “Business—Our Concessions.”
Our concessions may not achieve our projected levels of traffic volume.
The main source of cash revenue for our business is derived from the collection of toll road fees. Such
revenue is directly related to the volume of vehicles traveling on our toll roads and the frequency of traveler use. A
decrease in traffic might arise either from general economic circumstances or from a reduction in commercial
GA #100224v5
activities in the regions served by our toll roads. The level of traffic on a given road is also influenced by other factors
such as its connection to other parts of the federal and state road systems and other road networks and the availability
of alternative means of transportation and security conditions in Mexico and the specific regions in which our Toll
Road Concessions are located, all of which are beyond our control. In the past, certain of our Toll Road Concessions,
including the México-Toluca Toll Road Concession have not reached their projected traffic levels.
Eight of our Toll Road Concessions, the Ecatepec-Peñón toll road, the additional section of the MexicoToluca Toll Road (the Marquesa-Lerma Stretch), the Siglo XXI Toll Road, Patzcuaro-Uruapan and the Uruapan and
Morelia and Tlaxcala-Puebla beltways and the Elevated Viaduct of the Mexico Puebla Toll Road are under
construction and do not have an operating history. As such, it is impossible to predict the future level of traffic on
these toll roads. Furthermore, we cannot assure you that the current or expected traffic level on our roads will increase
or even remain stable. Decreased traffic could adversely affect our business, financial condition and results of
operations.
Notwithstanding that some of our Toll Road Concessions allow, subject to approval of the competent
authority, for the increase in toll rates in order to offset decreases in traffic volume, we cannot assure you that such
authorization will be granted, and even if granted, that the authorized increase will be sufficient to compensate for the
decrease in the traffic volume of the respective Toll Road Concession.
Moreover, we cannot assure you that the current or expected volume of operations in the Altamira Port
Terminal Concession will increase or remain stable. Decreased volume of operations could adversely affect our
business, financial condition and results of operations.
We generated a substantial amount of our revenues from the operation of one toll road, and these revenues are
currently used to service related debt.
We generated 20.9%, of our revenues for the year ended December 31, 2014, from the operation of the
México-Toluca toll road, which covers 19 km from Constituyentes and Reforma in Mexico City to La Venta, in the
State of Mexico. Any governmental action negatively affecting this concession, an economic recession affecting this
area of Mexico, any natural disaster or any other event that may adversely affect the level of traffic on this toll road
would have a significant material adverse effect on our financial condition and results of operations. Although
revenues generated by this toll road are important in terms of cash flow, due to the pledge of toll fees under
securitization transactions involving this toll road, currently we do not recover fees collected thereunder.
The regulations pursuant to which the maximum applicable toll rates are established and adjusted do not ensure
that our concessions will be profitable or achieve the expected level of return.
The regulations applicable to our Toll Road Concessions establish maximum toll rates that we can charge
vehicles using our toll roads. While some of our concessions provide for an extension of their respective terms to
allow us to achieve the agreed upon rate of return, if the relevant governmental authority decides not to grant such an
extension, our concessions do not guarantee that our projects will be profitable or that specified rates of return will be
achieved.
Our concessions provide that maximum toll rates will be adjusted on a biannual or annual basis based on
inflation (determined by reference to the INPC). Although we are entitled to request additional adjustments to
maximum toll rates under certain circumstances, certain concessions provide that such a request will be approved
only if the relevant governmental authority determines that certain limited events specified in our concessions, such as
extraordinary events affecting traffic on the toll road, have occurred. Therefore, there can be no assurance that any
such request would be granted, and consequently our operations and financial condition could be affected by an
increase in our operation costs.
We are exposed to risks related to the construction, operation and maintenance of our projects.
There are different factors beyond our control that could cause increases in costs and delays in the
construction process of our infrastructure projects, such as a shortage of construction materials, labor related issues,
GA #100224v5
natural disasters and adverse weather. Also, there may be delays in obtaining the Release of the Rights of Way of the
projects in process of construction. The increase in costs and delays in the construction processes, including delays in
obtaining the respective Release of the Rights of Way, could affect our ability to meet the construction schedules of
the eight Toll Road Concessions that are currently under construction.
The increase in costs and delays in the construction process described above could limit our ability to realize
the expected return on these projects, increase our operating or capital expenses and adversely affect our business,
results of operations, prospects and financial condition. Such delays or budgetary overruns also could limit our ability
to upgrade our toll road collection systems and facilities or to comply with our concessions’ annual operation and
maintenance programs, which under the terms of our concessions, could result in the revocation of our concessions.
In addition, our operations may be adversely affected by interruptions or failures in our technology systems.
We rely on technology systems and infrastructure to support our business, including toll road collection and traffic
measurement systems. Any of these systems may be susceptible to outages due to power loss, telecommunications
failures and similar events. The failure of any of our technology systems may cause disruptions in our operations,
adversely affecting toll road collections and profitability. While we have business continuity plans in place to reduce
the adverse impact of information technology system failures on our operations, we cannot assure you that these plans
will be effective.
We may not be successful in obtaining new concessions.
The market for transportation infrastructure concessions in Mexico is highly competitive. We compete with
Mexican and foreign companies for infrastructure concessions in Mexico. Some of our competitors may have better
access to capital and greater financial and other resources, which would give them a competitive advantage in bidding
for such projects. We cannot assure you that we will continue to successfully obtain new concessions.
Our performance may be adversely affected by decisions of Mexican governmental authorities regarding the
grant of new concessions for infrastructure facilities.
Mexican governmental authorities may decide to limit the scope or the term of our concessions, or not to
grant new concessions. Historically, such decisions have generally been dependent on the state of the Mexican
economy. Mexican governmental authorities may face budget constraints that may limit the development and
awarding of infrastructure projects and concessions, which could adversely affect our business. The reduction in the
number of concessions granted by the government and the unavailability of transport related infrastructure concession
opportunities may adversely affect our business, expansion plans, financial condition and results of operations. A
decrease in the number of new infrastructure concessions granted by the governmental authorities as a result of a
deterioration of the Mexican economy or changes in Mexican governmental policy, among other reasons, may have
an adverse effect on our financial condition and results of operations.
In recent years, due to the impact of the credit crisis and turmoil in the global financial system, the Mexican
Government has extended the time period to award certain bidding processes, in part because of the need to
reevaluate the corresponding projects’ feasibility in the current economic environment. These and other delays,
including payment delays, can also result from changes in administration at the federal, state and local level reviewing
the terms of project contracts previously granted or pursuing different priorities than the previous administration. The
economic and political developments in Mexico and globally, over which we have no control, could negatively affect
our operations, financial condition and results of operations. See “—Risks Related to Mexico— Changes in
economic, political and social conditions in the states in which we operate within Mexico may adversely affect our
business, financial conditions and results of operations.”
We are regulated by the Mexican Government at the federal, state and municipal level. Existing laws and
regulations and changes thereto may adversely affect our business, financial condition and results of operations.
We operate in a highly regulated environment. Our profitability depends on our ability to comply with
various laws and regulations on a timely and efficient basis. We cannot assure you we will be able to do so or that
changes to existing laws and regulations will not impair our ability to do so.
GA #100224v5
In addition, the terms of our concessions are regulated by various federal and state governmental entities in
Mexico. These regulations limit our operating flexibility, which could have an adverse effect on our business,
financial condition and results of operation. We generally do not have the ability to unilaterally change our obligations
should vehicular traffic or other assumptions on which the related regulations were based change during the
applicable term.
If we fail to comply with the terms of one of our concessions, regulations or other applicable law, we cannot
predict the type and amount of the sanctions that are likely to be assessed for a given violation. We also cannot assure
you that we will not encounter difficulties or increased costs in complying with such law and regulations.
We are subject to numerous environmental and safety regulations that may become more stringent in the future
and may result in increased liabilities and increased capital expenditures.
Our activities are subject to comprehensive federal, state and local environmental and safety legislation, as
well as supervision by Mexican governmental agencies that are responsible for the implementation of such laws and
related policies. These laws mandate, among other requirements, that we obtain environmental licenses for the
construction and operation of new highway facilities, modifications to the original construction project, changes to
forestry land use, construction works on federal zones or use thereof, and installation of new equipment required for
our operations.
Our activities in our asphalt mix and related product facility located in the Altipac Plant are also subject to
potential environmental risks which may impact our performance. These activities require us to carry out actions to
prevent environmental damages, which may force us to incur unplanned capital expenditures or other expenses to
mitigate potential damages.
Compliance with enhanced environmental and safety regulations could also force us to make capital
expenditures to conform to such enhanced regulations. Such additional expenditures may imply a decrease on our
resources that are destined to the construction and maintenance of Toll Road Concessions. In addition, compliance
with applicable environmental, health and safety regulations, including obtaining related licenses, could cause delays
in the schedule of construction and improvements of our Toll Road Concessions.
Our participation in Brownfield Projects could be subject to certain risks.
We participate in a number Brownfield Projects, which are either already existing or are in the process of
development, that may require considerable rehabilitation and renovation. In operating and maintaining Brownfield
Projects, we may encounter latent defects, construction that was previously performed under subpar standards and
undetected risks which may require additional work, capital expenditures or unforeseen costs, all of which may
adversely impact our financial condition, results of operations and prospects.
The Mexican Government, at the federal, state or municipal level, could expand third party concessions or grant
new concessions that compete with our concessions or build alternate toll-free roads or ports which could have an
adverse effect on our business, financial condition and results of operations.
The Mexican Government, at the federal or state level, could grant additional or expanded concessions to
operate existing government-managed roads or ports which could compete directly with our concessions. New
concessions or extending the scope of existing concessions could compete directly with our concessions, which might
imply a decrease in the traffic volume of our toll roads or use of our port.
We cannot assure you that the granting authority will refrain from granting new concessions that could
compete with a certain Toll Road Concession or that it will indemnify us in case it grants such new concessions. We
also cannot assure you that the amount of a potential indemnification paid by the granting authority will completely
compensate us in a way that our operations and financial condition are not affected by the authority’s noncompliance.
On the other hand, the Federal Government is required by law to maintain toll-free and public roads. In case
the Federal Government decides to allocate more resources to improve existing toll-free roads or builds new roads
GA #100224v5
that cover the same areas as the roads we operate, the traffic volume on the roads operated by us could be reduced.
Lastly, the Federal Government, or State and Municipal Governments could promote the use of alternative
means of transportation that directly compete with the concessions granted to us and affect traffic volume of our
concessions.
Any decrease on the traffic volume of our roads as a result of any of the previously mentioned causes, could
have an adverse effect on our business, financial condition and results of operations.
Increases in construction costs or delays in the construction process, including delays in obtaining the Release of
Rights of Way, could adversely affect our ability to meet the construction requirements and schedules set forth in
certain of our concessions and adversely affect our business, results of operations and financial condition.
We may face construction delays or increases in costs for various reasons, some which are beyond our
control, such as delays in obtaining the Release of Rights of Way, scarcity of construction supplies, labor issues,
security conditions, natural disasters and inclement weather. Toll road concessions may require the grantor of the
concession, the concessionaire or both to obtain the Release of Rights of Way for the project in accordance with a
construction schedule. If such authorization is not timely obtained for projects that are still under construction such as
the Ecatepec-Peñón Stretch, we may incur additional costs and delays, and therefore we may need a modification or
extension of the concession term. For example, we have obtained the Release of Rights of Way of 15.64 km (92%) of
the total 17 km of the Ecatepec-Peñón Stretch with the respective landowners, and are currently negotiating the
Release of Rights of Way for the rest of such toll road. We cannot assure you how long this process may take. In
addition, higher than expected maintenance costs relating to our concessions could also affect our financial condition
and results of operations. We cannot assure you that the grantor of the concession will agree to amend any such
concessions to mitigate the effects of any increased costs.
If any of our subsidiary concessionaires were to default on their payment obligations under indebtedness
incurred by them, we may lose the rights under the related concessions.
Our subsidiaries CPAC, ATISA and Zonalta, are part of a series of securitization transactions under which
collection rights relating to certain of our Toll Road Concessions have been pledged to guarantee the repayment of
such debt. In addition, under the terms of the securitizations each of such affiliates, have granted the collection rights
under their concessions as collateral. See “Management’s Discussion and Analysis of Financial Condition and Results
of Operations—Liquidity and Capital Resources—Indebtedness.” While each of these securitizations have been
entered into by certain of our subsidiaries without recourse to our Company, the failure to comply with payment
obligations under such securitizations may cause the bondholders of such securitizations to seek recourse against such
subsidiaries which may result in the loss of revenues from such Toll Road Concessions, and adversely affect our
financial condition and results of operations.
We may have difficulty raising additional capital, which could impair our ability to operate our business or
achieve our growth objectives.
In the event that our cash balances and cash flow from operations, together with financings under our
subsidiaries, becomes insufficient to make investments, make acquisitions or provide needed additional working
capital in the future, we could require additional financing from other sources. Our ability to obtain such additional
financing will depend in part upon prevailing capital market conditions, as well as conditions in our business and our
operating results, and those factors may affect our efforts to arrange additional financing on terms that are satisfactory
to us. The market volatility in recent years has created downward pressure on stock prices and credit capacity for
certain issuers, and for financial market participants generally. If adequate funds are not available, or are not available
on favorable terms, our ability to invest in our business or in new opportunities for growth could be adversely
affected.
Collective labor disputes and labor-related lawsuits may arise.
As of December 31, 2014, approximately 62.9% of our employees were members of several workers’
GA #100224v5
unions. See “Business—Human Resources.” We cannot assure you that there will be no labor related conflicts or
disputes in the future, including during the renegotiation of the terms of the collective bargaining agreements
(contratos colectivos de trabajo) each year regarding wages and every two years regarding other benefits and labor
provisions.
Our continued growth requires us to hire and retain qualified personnel.
Over the past years, the demand for employees who engage in and are experienced in the services we
perform has continued to grow. The continued growth of our business is dependent upon being able to attract and
retain personnel, including engineers, corporate managers and craft employees, who have the necessary and required
experience and expertise. Competition for this kind of personnel is intense and we may experience difficulty in
attracting and retaining personnel, which could reduce our capacity to perform adequately in present projects and to
bid for new ones.
The operation of our construction and materials sector could be adversely affected by an asphalt supply
shortage.
PEMEX is the only asphalt supplier we have in Mexico. During the last years, PEMEX has been unable to
meet the national demand for asphalt on an ongoing basis, which has generated an asphalt shortage in Mexico. Our
business in the construction and materials sector could be affected by the shortage of asphalt in the Mexican market if
PEMEX continues to be incapable to meet the demand of asphalt in Mexico.
We are exposed to market risk.
In our normal course of operations, we are exposed to market risks that are mainly related to the possibility
that certain changes in the conversion rate from UDIs to Pesos could adversely affect the value of our financial assets
and liabilities and our future cash flows and earnings. The UDI is a conversion factor that takes into account the
accounting effects of inflation. At December 31, 2014, 35.1% of our debt obligations, primarily securitizations, were
denominated in UDIs. This risk is mitigated in part by the fact that the revenue generated by the concessions that were
securitized is subject to annual adjustments based on the inflation rate.
In addition, we are exposed to market risks related to fluctuations in interest rates given that some of our
issuances of debt securities in Mexico bear interest at variable rates that are linked to the TIIE, and any increase in
such rate would result in us having to face higher funding costs.
Risks Related to Mexico
Changes in economic, political and social conditions in Mexico may adversely affect our business, financial
condition or results of operations.
All of our assets and operations are located in Mexico, as a result of that, our business operations depend, to
some extent, on the performance of the overall Mexican economy. As a result, negative changes in economic,
political and social conditions in Mexico may adversely affect our business, financial condition and results of
operations.
Historically, Mexico has experienced economic crises, caused by internal and external factors, characterized
by exchange rate instability (including large devaluations), high inflation, high domestic interest rates, economic
contraction, a reduction of international capital flows, a reduction of liquidity in the banking sector and high
unemployment rates. In addition, Mexico has recently experienced higher rates of crime and increased problems
relating to the drug war in particular in northern Mexico, which may continue to increase in the future. Such
conditions may have an adverse effect on our business, financial condition or results of operations.
GA #100224v5
Mexico experienced a period of slow growth from 2001 through 2003, primarily as a result of the downturn
in the U.S. economy. In 2012 GDP grew by approximately 3.8% and inflation reached 4.1% 1, in 2013 GDP grew
only 1.1%2 and inflation reached 3.56%3, and in 2014 GDP grew 2.1%4 and inflation reached 4.08%5.
In addition, current nominal interest rates in Mexico have been and are expected to continue to be high as
compared to other countries. The annualized interest rates on 28-day Certificados de la Tesorería (“Cetes”) averaged
approximately 4.3%, 4.14%, and 3.0% for 2012, 2013, and 2014, respectively6. As of December 31, 2014, all of our
subsidiaries’ debt was denominated in pesos, and we expect to continue incurring peso-denominated debt for our
projects in Mexico for which the source of repayment of financing is in pesos. To the extent that we incur pesodenominated debt in the future, it could be at high interest rates.
While the Mexican Government does not currently restrict the ability of Mexican companies or individuals
to convert pesos into dollars (except for certain restrictions related to cash transactions involving a dollar payment to a
Mexican bank) or other currencies it could institute restrictive exchange control policies in the future. However, we
cannot anticipate how the Mexican Government would react in case of a severe devaluation or substantial
depreciation, therefore we cannot guarantee that the Mexican Federal Government will maintain its current monetary
policy regarding the peso or that the peso’s value will not fluctuate significantly in the future. If the peso experiences
devaluation or if the Federal Government implements a different policy with respect to the peso or in case inflation or
interest rates increase significantly or if the Mexican economy is otherwise adversely impacted, our business,
financial condition or results of operations could also be materially and adversely affected.
Furthermore, the Mexican Government has exercised, and continues to exercise, significant influence over
the Mexican economy. Mexican governmental actions concerning the economy and state-owned enterprises could
have a significant effect on Mexican private sector entities in general, and us in particular, as well as on market
conditions, prices and returns on Mexican securities, including our securities.
Changes in economic, political and social conditions in the states in which we operate within Mexico may
adversely affect our business, financial conditions and results of operations.
Our Toll Road Concessions are primarily located in Mexico City and the States of Mexico, Puebla, Tlaxcala,
Michoacán, Colima, Sonora and Morelos. All our current concessions are issued either by such local governmental
authorities or the Mexican Federal Government. The traffic volume on the Toll Roads Concessions located in any of
these regions may decrease if any such states suffer adverse changes as a result of economic recessions, natural
disasters –which may result in losses in excess of our insurance coverage–, increase in criminal rates or the
occurrence of any other event that might affect the public and social order in any of such states.
Changes in the Federal Government’s legal system or in the Mexican States where we operate could adversely
affect our business, financial condition and results of operations.
__________________________
1
Information published by the World Bank, available at: www.bancomundial.org.
Information published by El Economista, available at:http://eleconomista.com.mx/finanzaspublicas/2014/02/21/pib-mexico-apenas-avanzo-112013
3
Information published by the National Institute for Statistics and Geography in Mexico (Instituto Nacional de Estadística y Geografía),
available at:
http://www.inegi.org.mx/sistemas/indiceprecios/calculadorainflacion.aspx
44
Information published by El Economista, available at: http://eleconomista.com.mx/finanzas-publicas/2015/02/20/pib-mexico-registra-alzaanual-26-4t-2014
2
5
Information published by CNNEXPANSION, available at: http://www.cnnexpansion.com/economia/2015/01/08/la-inflacion-en-mexico-cierra2014-en-408
6
Information published by the Mexican House of Representatives (Cámara de Diputados), available at:
http://www3.diputados.gob.mx/camara/001_diputados/006_centros_de_estudio/02_centro_de_estudios_de_finanzas_publicas1/005_indicadores_
y_estadisticas/01_historicas/01_ind_macroeconomicos_1980_2012/08_tasas_de_interes.
GA #100224v5
Our concessions were granted by the authorities in the States of Mexico, Morelos, Puebla, Tlaxcala,
Michoacán, Sonora and Tamaulipas and by the Federal Government. Any change to the legal, regulatory or
administrative system that could affect the authorities of such States or the Federal Government, as well as the
implementation of stricter rules or the institution of additional requirements by such authorities, could result in the
need for additional actions on our end to comply with the applicable legislation and maintain our concessions. The
execution of such additional actions might adversely affect our business, financial condition and results of operation.
Developments in other countries could adversely affect the Mexican economy, our business, financial condition
or results of operations and the market value of our shares.
Historically, both the Mexican economy and the market value of securities of Mexican companies has been,
to varying degrees, affected by economic and market conditions in other countries. The market value of securities of
Mexican companies is, to varying degrees, affected by economic and market conditions in other emerging market
countries. Investors' reactions to developments in Mexico or any of these other countries may have an adverse effect
on the market value of securities of Mexican issuers, including us.
In addition, the direct correlation between economic conditions in Mexico and the United States has
sharpened in recent years as a result of the North American Free Trade Agreement, or NAFTA, and increased
economic activity between the two countries. As a result of the slowing economy in the United States and the
uncertainty it could have on the general economic conditions in Mexico and the United States, our financial condition
and results of operations could be adversely affected. In addition, due to recent developments in the international
credit markets, capital availability and cost could be significantly affected and could restrict our ability to obtain
financing or refinance our existing indebtedness on favorable terms, if at all, materially adversely affecting us.
We cannot assure you that political or social developments over which we have no control, in any of the
countries in which we have operations, will not have a corresponding adverse effect on the global market or on our
business, financial condition or results of operations.
Mexico has experienced a period of increasing criminal violence and such activities could continue to affect our
operations.
Recently, Mexico has experienced a period of increasing criminal violence, primarily due to the activities of
drug cartels and related organized crime. These activities, their possible escalation and the violence associated with
them has affected traffic volumes on certain of our toll roads during recent years, and may in the future force the
governmental authorities to adopt certain drastic measures affecting the circulation of vehicles in, and our rights in
connection with, certain Toll Road Concessions, all of which would have a negative effect on our business, financial
condition and results of operations.
Risks Relating to our Series L Shares
The holders of Series L Shares may only participate or vote in shareholder meetings held to decide certain
limited matters.
We have two series of shares, the Ordinary Shares, which grant full voting rights to their holders and the
Series L Shares, which grant limited voting rights to their holders. See “Description of Capital Stock”.
The holders of Series L Shares may only participate or vote in a shareholder meeting held to decide certain
limited matters, in accordance with our bylaws and applicable law, and thus Series L Shares holders may not vote on
other matters that require shareholders’ approval, including without limitation, the declaration of dividends.
The total amount of Series L Shares issued is limited by the LMV and therefore those shares may not have the
same trading levels of our Ordinary Shares.
In accordance with Article 54 of the LMV, except with an authorization from the CNBV, public companies can
only issue shares which do not limit or restrict the rights and obligations of its holders, contrary to the case of our
GA #100224v5
Series L Shares which grant limited voting rights.
In consequence, the number of Series L Shares issued is limited, which may have an adverse effect on the
liquidity and market price of the Series L Shares.
Series L Shares are not convertible into Ordinary Shares and have no preference with respect to dividend
payments or in the event of liquidation.
Series L Shares are not convertible into Ordinary Shares, therefore holders of Series L Shares should assume that
the voting rights conferred by Series L Shares will remain limited for the entire term they maintain their investment in
such Series L Shares.
The Ordinary Shares and Series L Shares give their holders the same economic rights, therefore holders of both
Ordinary Shares and Series L Shares are entitled to receive, in proportion to their shareholding and in equal
circumstances, any dividends that the shareholders meeting decide from time to time (without the vote of the Series L
Shares). Additionally, the Ordinary Shares don’t have any preference over the Series "L" Shares, or vice versa, in case
the Company is dissolved and all shareholders will be entitled to receive, in proportion to their shareholding and in
equal circumstances, any remaining amounts after we have paid all our liabilities. Due to the fact that Series L Shares
grant limited voting rights and simultaneously provide the same economic rights as the Ordinary Shares, the liquidity
and market price of the Series L Shares could be less than the liquidity and market price of the Ordinary Shares, and
even less than the price investors paid for the same.
The market price of our Series L Shares may fluctuate significantly and you could lose all or part of your
investment.
Volatility in the market price of our Series L Shares may prevent you from being able to sell your Series L
Shares at or above the price you paid for your shares. The market price and liquidity of the market for our Series L
Shares may be significantly affected by numerous factors, some of which are beyond our control and may not be
directly related to our operating performance. These factors include, among others:

significant volatility in the market price and trading volume of securities of companies in our sector, which
are not necessarily related to the operating performance of these companies;

investors’ perceptions of our prospects and the prospects of our sector;

difference between our actual financial and operating results and those expected by investors;

changes in earnings or variations in operating results;

operating performance of companies comparable to us;

actions by our Principal Shareholders with respect to the disposition of the Shares it beneficially owns or
the perception that such actions might occur;

additions or departures of key management personnel;

announcements by us or our competitors of significant acquisitions, divestitures, strategic partnerships,
joint ventures, or capital commitments;

new laws or regulations or new interpretations of laws and regulations, including tax guidelines, applicable
to our businesses or the Shares;

general economic trends in the Mexican, U.S. or global economies or financial markets, including those
resulting from war, incidents of terrorism or responses to such events; and
GA #100224v5

political, economic and social conditions or events in Mexico, the United States and other countries.
In the future, we may issue other equity securities in addition to the Series L Shares, subject to the approval
of our shareholders pursuant to our bylaws. When such equity instruments are issued, the economic and voting rights
of the shareholders may dilute. Additionally, the Principal Shareholders may sell their stake in the Company, which
together with any additional issuance of equity instruments could result in a negative market perception which could
adversely affect the market price of our shares, including Series L Shares.
Our Principal Shareholders will continue to have significant influence over us after this offering, and their
interests could conflict with yours.
Our Principal Shareholders beneficially own approximately 43.86% of our outstanding capital stock. Series
L Shares will represent approximately 11.2% of our outstanding capital stock. Therefore as long as our Principal
Shareholders continue to hold a substantial percentage of common shares or of our capital stock in the aggregate, they
will continue to have a significant influence to determine the outcome of important matters submitted for a vote to our
shareholders, including those matters with respect to which Series L Shares do grant voting rights, and thus to
influence our business policies and affairs, including, among others, determinations with respect to:

the composition of our board of directors and, consequently, determinations of our board with respect
to our business direction and policy, including the appointment and removal of our officers;

mergers, other business combinations and other transactions, including those that may result in a
change of control;

decisions regarding payment of dividends or other distributions and the amount of any such dividends
or distributions;

sales and dispositions of our assets; and

the amount of debt that we incur.
Our Principal Shareholders may influence the adoption of actions that could be contrary to your interests,
and, in some cases, may be able to prevent other shareholders, including you, from blocking these actions or from
causing different actions to be taken. We cannot assure you that our Principal Shareholders will act in a manner
consistent with your best interests. In addition, actions by our Principal Shareholders with respect to the disposition of
our shares, or the market perception that such action might occur, may negatively affect the trading prices of our
Shares.
We are subject to certain risks relating to our inability to obtain the minimum quorum requirements
established in our bylaws in connection with our ordinary and/or extraordinary shareholders’ meetings.
Series L Shares only count for purposes of determining a quorum of the general and special shareholders'
meetings to which their holders should be called to exercise their limited voting rights, that is, they are only
considered in the case of meetings called to discuss any of the topics about which they are entitled to vote. See
“Description of Capital Stock” for a discussion of voting rights.
Our bylaws provide that in order for an ordinary shareholders’ meeting to be legally convened on a first call,
at least 70% of our outstanding capital stock entitled to vote must be present or duly represented at such meeting. In
the event of a second call or further calls for a meeting, the meeting would be legally convened when at least 66.66%
of the Shares of our outstanding capital stock entitled to vote are present or duly represented at such meeting.
Resolutions at ordinary meetings of shareholders pursuant to a first or further call are legally valid when approved by
the holders of at least 40% of our outstanding capital stock entitled to vote, provided that, for resolutions regarding
certain matters, it would require the affirmative vote of at least 66.66% of our outstanding capital stock entitled to
vote.
GA #100224v5
Our bylaws provide that in order for an extraordinary shareholders’ meeting or a special shareholders’
meeting to be legally convened on a first call, at least 75% of our outstanding capital stock entitled to vote must be
present or duly represented at such meeting. In the event of a second call or further calls for a meeting, extraordinary
shareholders’ meetings or special shareholders’ meetings are legally convened when at least 67% of our outstanding
capital stock entitled to vote is present or duly represented at such meeting. Resolutions at an extraordinary
shareholders’ meeting or a special shareholders’ meeting are valid when adopted by the holders of at least 50% of our
outstanding capital stock entitled to vote, provided that, for resolutions regarding certain matters, it would require the
affirmative vote of at least 66.66% of our outstanding capital stock entitled to vote.
The Principal Shareholders’ participation in an ordinary or outstanding shareholders’ meeting is essential to
obtaining the minimum quorum necessary to conduct business at such meetings. If we are unable to obtain the
minimum quorum requirements in connection with meetings of our shareholders, we may be unable to take decisions
necessary to conduct our operations.
For more information regarding which matters require a higher percentage vote of our outstanding capital at
an ordinary or extraordinary shareholders’ meeting, see “Description of Capital Stock—Quorum.”
Other Risks
We have not paid dividends in the past and we cannot assure you that we will pay dividends in the future.
The payment of dividends and the amounts of such dividend payments are subject to the recommendation of
our board of directors and approval by the holders of our Ordinary Shares at a shareholders meeting. So long as our
Principal Shareholders continue to own a substantial amount of our shares, they will have the ability to influence
decisions whether dividends are to be paid and the amount of any such dividends. We have not paid dividends in the
past and we cannot assure you that we will pay dividends in the future. Furthermore, we cannot guarantee that the
holders of our ordinary shares will approve the dividend policy recommended by our board of directors, or what the
terms thereof will be.
Our holding company structure may limit our ability to pay dividends to our shareholders because we will rely
on distributions from our operating subsidiaries.
We are a holding company with no operations. Therefore, we will be dependent upon the ability of our
operating subsidiaries to generate earnings and cash flows and distribute them to us in the form of dividends to enable
us to meet our expenses and to pay dividends to our shareholders. The ability of certain of our operating subsidiaries
to make distributions to us is subject to limitations under the terms of the securitizations and services agreements to
which they are party. Some of those restrictions include the pledges created by some of our subsidiaries over the
collection rights from certain Toll Road Concessions, which secure such subsidiaries’ repayment obligations. In such
cases, we do not receive such collections as cash flow. If, as a consequence of these various limitations, we are unable
to generate sufficient distributions from our operating subsidiaries, we may not be able to declare or may be required
to delay or cancel payment of dividends on our shares.
Any failure on our part to comply with the requirements established by the respective authorities in connection
with the maintenance of the listing of our shares on the BMV could result in the suspension of such listing and, in
certain cases, the termination of public trading in our shares.
As a company with shares listed on the BMV, we are required to comply with certain requirements in order
to maintain the listing of our shares on the BMV. Such requirements include (i) ensuring that at least 12% of our
shares are publicly held and (ii) ensuring that our shares are publicly held by at least 100 record shareholders.
We cannot provide any assurance that we will maintain full compliance with all of the applicable
requirements to maintain such listing in the future and, accordingly, we cannot assure you that our shares will remain
listed on the BMV. Any failure on our part to comply with any applicable requirements in connection with the listing
of our shares on the BMV could result in the suspension or termination of the registration of our Shares and their
trading on the BMV.
GA #100224v5
Additionally, according to the LMV, the registration of the shares in the RNV can be canceled by the CNBV
in case of serious or repeated violations to the LMV. In such case or in case of breach of the listing requirements set
forth in the preceding paragraph, we would be required to make a public offer to purchase our shares in a maximum
term of 180 days, if so requested by the CNBV.
The ownership and transfer of our Shares are subject to certain restrictions pursuant to Mexican law and our
bylaws.
The ownership and transfer of our Shares are subject to certain restrictions pursuant to LMV and CNBV
rules, as well as other applicable Mexican securities laws, rules and regulations, including insider trading rules and
disclosure requirements.
Our bylaws provide that any person or group of persons acting in concert wishing to acquire more than 3%
of the outstanding Shares from any of the members of the Peñaloza Family, in a single transaction or a series of
transactions, must obtain the prior approval from the board of directors by the affirmative vote of at least 66.66% of
the total number of directors. See “Description of Capital Stock—Share Purchase Restrictions.”
The significant share ownership of our management and members of our board of directors, coupled with their
rights under our bylaws, may have an adverse effect on the future market price of our Shares.
As of December 31, 2014, the total beneficial shareholding of our directors and executive officers was
approximately 33.47%, of our outstanding shares. This amount included shares beneficially owned by Mr. David
Peñaloza Sandoval, Mrs. Adriana Graciela Peñaloza Alanís (one of our directors) and Mr. David Peñaloza Alanís (our
Chief Executive Officer and Chairman of our board of directors).
Actions by our management and board of directors with respect to the disposition of the Shares they
beneficially own, or the perception that such action may occur, may adversely affect the trading price of our Shares on
the Mexican Stock Exchange.
Our shareholders may be subject to liability for certain votes of their securities.
Our shareholders are not liable for our obligations. Shareholders are generally liable only for the payment of
the Shares they subscribe. However, shareholders who have a conflict of interest with us and who do not abstain from
voting at the respective shareholders’ meeting may be liable for damages to us, but only if the transaction would not
have been approved without such shareholders’ votes.
Our bylaws restrict the ability of non-Mexican shareholders to invoke the protection of their governments with
respect to their rights as shareholders.
As required by Mexican law, our bylaws provide that non-Mexican shareholders will be considered to be
Mexicans in respect of their ownership interests in us and will be deemed to have agreed not to invoke the protection
of their governments in certain circumstances. Under this provision, a non-Mexican shareholder is deemed to have
agreed not to invoke the protection of his or her own government through such government interposing a diplomatic
claim against the Mexican Federal Government with respect to the shareholder’s rights as a shareholder, but is not
deemed to have waived any other rights he or she may have, including any rights under the U.S. securities laws, with
respect to his or her investment in us. If you invoke such governmental protection in violation of this agreement, your
Shares could be forfeited to the Mexican Federal Government.
If we issue additional equity securities in the future, you may suffer dilution, and trading prices for our equity
securities may decline.
We may issue additional Shares for financing future acquisitions or new projects or for other general
corporate purposes. Any such issuance or disposal could result in a dilution of your ownership stake and/or the
perception of any such issuances or disposals could have an adverse impact on the market price of the Shares.
GA #100224v5
Forward-Looking Statements
This Annual Report contains forward-looking statements. Examples of such forward-looking statements
include, but are not limited to: (i) statements regarding our results of operations and financial position; (ii) statements
of plans, objectives or goals, including those related to our operations; and (iii) statements of assumptions underlying
such statements. Words such as “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “guidance,”
“intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” and similar expressions are intended to identify
forward-looking statements but are not the exclusive means of identifying such statements.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and
specific, due to multiple factors, many of which are beyond our control, therefore there is also the risk that the
predictions, forecasts, projections and other forward-looking statements will not be achieved. We consider that the
plans, intentions and expectations reflected in our projections are reasonable; however, we cannot guarantee our
success, consequently we caution investors that a number of important factors could cause actual results to differ
materially from the plans, objectives, expectations, estimates and intentions expressed or implied in such forwardlooking statements, including the following factors:

limitations on our ability to operate our existing concessions profitably;

the termination or recall of our concessions;

decreases in the traffic volume of our concessioned toll roads;

limitations on our ability to obtain new concessions and operate them profitably;

governmental actions and regulation affecting our concessions;

competition in our industry and markets;

increases in construction and operating costs;

increases in our capital expenditures and inability to complete the construction of projects within the
expected timeframe and budget;

the performance of the Mexican economy;

limitations on our access to sources of financing on competitive terms;

our ability to service our debt;

conditions of financial markets and our ability to refinance our financial obligations as needed;

restrictions on foreign currency convertibility and remittance outside Mexico;

our ability to execute our corporate strategies;

failure of our information technology systems, including data and communications systems;

natural disasters affecting our concessions;

changes in exchange rates, market interest rates or the rate of inflation;

the effect of changes in accounting principles, new legislation, intervention by regulatory authorities,
government directives and monetary or tax policy in Mexico; and
GA #100224v5

the risk factors discussed under “Risk Factors.”
All forward-looking statements contained in this Annual Report are qualified in their entirety by these risks,
uncertainties and other factors. You are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this offering memorandum. Future events or circumstances could cause actual
results to differ materially from historical results or those anticipated.
Should one or more of these factors or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected,
forecast or intended. Prospective investors should read the sections of this Annual Report entitled “Executive
Summary”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and
“Business” for a more complete discussion of the factors that could affect our future performance and the markets in
which we operate.
In light of these risks, uncertainties and assumptions, the forward-looking events described in this Annual
Report may not occur. These forward-looking statements speak only as to the date of this Annual Report and we
undertake no obligation to update or revise any forward-looking statement, whether as a result of new information or
future events or developments. Additional factors affecting our business emerge from time to time and it is not
possible for us to predict all of these factors, nor can we assess the impact of all such factors on our business or the
extent to which any factor, or combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statement. Although we believe the plans, intentions and expectations reflected in
or suggested by such forward-looking statements are reasonable, we cannot assure you that those plans, intentions or
expectations will be achieved. In addition, you should not interpret statements regarding past trends or activities as
assurances that those trends or activities will continue in the future. All written, oral and electronic forward-looking
statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary
statement.
4)
OTHER SECURITIES
As of the date of this Annual Report, the Company has 428’086,358 Shares registered at the RNV, of which
(i) 380’123,523 are Ordinary Shares, “A” Series, nominative and with full voting rights, without stated par value, and
(ii) 47’962,835 are Series L Shares, nominative, with limited voting rights, without stated par value, all of which
correspond to the fixed portion of the capital stock and are listed in the BMV under the key word “PINFRA”.
Likewise, the Company has issued senior bond trusts through its Subsidiaries by means of the following
issuances:
Atlixco-Jantetelco 2006 Issuance;
Peñón-Texcoco 2004 Issuance;
Santa Ana-Altar 2006 Issuance; and
Tenango-Ixtapan de la Sal 2005 Issuance.
For more information regarding the aforementioned issuances, see Section “Comments and Analysis of the
Management over the Financial Situation and the Operation Results – Liquidity and Financing Funds –
Securitizations” of this Annual Report.
In September 1993, our predecessor company, Grupo Tribasa, S.A. de C.V. (“Tribasa”), made a public
offering of ADSs, each representing 20 shares of our common stock, and listed the ADSs on the NYSE. In
connection with such offering, Tribasa entered into the Deposit Agreement dated September 29, 1993 with Bank of
New York Mellon (formerly The Bank of New York), in its capacity as depositary. Our ADSs were delisted from the
NYSE on February 22, 2002, but, as of the date of this Annual Report, the Deposit Agreement has not been
terminated and the ADSs continue to be outstanding.
GA #100224v5
We have been informed by the Depositary that, as of March 31, 2014, there were 365,854 ADSs outstanding
on the register of the Depositary, representing 7,317,080 Ordinary Shares.
The following tables shows the maximum and minimum prices and volume used in the foreign market for
the periods indicated.
In each one of the 5 last years:
Year
Maximum
Minimum
Volume
2010
$71.00
$37.15
61,600
2011
$103.51
$68.26
56,100
2012
$132.84
$82.00
32,100
2013
$251.12
$135.7
35,500
2014
$287.65
$211.59
20,500
Note: Price of the ADSs in U.S. Dollars.
In each semester of the past 2 years:
Period
Maximum
Minimum
Volume
First Semester 2013
$189.87
$135.7
20,400
Second Semester 2013
$254.12
$176.44
15,100
First Semester 2014
$231.45
$285
9,700
Second Semester 2014
$287.65
$211.59
10,800
Note: Price of the ADSs in U.S. Dollars.
In each month for the las seven months:
Period
Maximum
Minimum
Volume
September 2014
$287.65
$266.25
1,100
October 2014
$276.90
$260
600
November 2014
$277.04
$246.52
1,200
December 2014
$245.40
$211.59
4,700
January 2015
$248.57
$218.94
3,200
February 2015
$236.45
$225.03
1,000
March 2015
$236.43
$210.86
2,100
Note: Price of the ADSs in U.S. Dollars.
On June of 2012, the Company filed a request at the SEC to terminate the registration of its ADSs before
such Commission. As a consequence, on September of 2012, the ADSs of the Company were delisted from such
Commission.
The Company is obliged to file at the CNBV and BMV certain periodic information in accordance to the
LMV, including quarterly and annual information. Up to the date of this Annual Report and during the past 3 years,
the Company has timely complied with its obligations of filing periodic information.
GA #100224v5
5)
SIGNIFICANT CHANGES TO THE RIGHTS OF SECURITIES REGISTERED IN THE RNV.
Except for the issuance of Series L Shares and the subsequent amendment to the corporate bylaws, the
Company has not made any significant change to the rights of the securities registered in the RNV.
6)
AVAILABLE INFORMATION.
We are also required periodically to furnish certain information to the CNBV and to the BMV, which will
be available in Spanish for inspection on the BMV’s website at www.bmv.com.mx, on the CNBV’s website at
www.cnbv.gob.mx and on our website at www.pinfra.com.mx.
We agree to furnish upon the request of any holder of the Shares, any information required. Any such
request may be made to us in writing at our principal offices located at Bosque de Cidros No. 173, Colonia Bosques
de las Lomas, C.P. 05120, Mexico D.F., Mexico, Attention: Mr. Carlos Césarman Kolteniuk.
For more information of the Company, please see the aforementioned website of the Company. Information
on our website is not incorporated by reference herein.
GA #100224v5
II.
1)
ACTIVITIES OF THE COMPANY
a)
BUSINESS
THE COMPANY
The Company is one of the leading operators of infrastructure concessions in Mexico based on the number
of concessions in our portfolio. The Company holds 17 concessions consisting of 16 highway concessions and one
port terminal. The highway concessions include the operation of 25 toll roads (17 of which are operational and 8 are
under construction) and a toll bridge. In addition to the operation of infrastructure concessions, we are engaged in (i)
the supervision of construction, operation and maintenance of highways; and (ii) the production of asphalt and other
supplies related to road construction. These activities’ main purpose is to serve our own portfolio of concessions, in
order to minimize costs, aiming to increase the return of our investment. We had consolidated revenues of Ps.4.5
billion for 2012, Ps.5.8 billion for 2013 and Ps 6.5 billion for 2014.
Our transportation infrastructure concessions division represented 68.6% of our consolidated revenues for
2014. Out of this 68.6%, 84.6% derived from the operation of highway and bridge concessions, while the remaining
15.4% derived from the port concession. Our 25 toll roads and one bridge have an aggregate extension of 989 km and
are strategically located principally in areas with high density population, with a total aggregate average daily vehicle
traffic of 160,989 up to December of 2014. During 2014 over 58.8 million vehicles registered tolls on our 17
operational toll roads that were operating that year and the José López Portillo bridge. We have a nationwide footprint
with concessions located in the Federal District and the states of Mexico, Morelos, Puebla, Tlaxcala, Michoacán,
Colima, Sonora and Tamaulipas. Our concessions produce stable revenues and predictable cash flows, which, as we
have reduced our debt, provide resources for the development of new infrastructure projects. Additionally, we have
been able to extend several concession terms through the widening and improvement of existing roads. As of
December 31, 2014, the average term of our portfolio of concessions was 33 years.
Our port concession is located in Altamira, Tamaulipas where we operate a multi-use port terminal with a
capacity to manage approximately 500,000 TEUs per year. The port is located in an area of approximately 269,470
m2, with 600 meters of water front, including an option to extend for an additional 350 meters. During 2014, we
managed 187,379 TEUs, 543,047 tons of steel, 29,383 of general cargo and 1,521 cars.
Our construction division provides services primarily to our concessions, and in some limited instances, to
third parties. Through this business division we render construction services for our new infrastructure developments,
as well as maintenance services for our concessions which are already fully operational. This business division
represented 24.5% of our consolidated revenues for 2014.
Through our construction materials and supplies division, we operate one of the largest asphalt production
facilities in the metropolitan area of Mexico City. We produce asphalt materials used for the paving of highways and
suburban roads. Our asphalt production facility has a capacity of approximately 1.4 million tons. In 2014, we
produced 360,614 tons of asphalt mix. Additionally, we operate other production facilities dedicated to the
construction of central barriers for highways and other prefabricated concrete elements used in urbanization and road
construction. Our construction materials and supplies division represented 6.9% of our consolidated revenues during
2013.
The construction sector of the Company performs engineering and contruction works, as well as placement
of asphalt mix, among others. This sector accounted for 24.5% of consolidated revenues of the company in the fiscal
year of 2014. The construction division provides services to the Company in the development and construction of its
concessions and, sometimes, to third parties. The works built and by means of which revenues derive from for this
division were the Reforma-Constituyentes distributor, the Acopilco distributor, expansions of the Altar-Pitiquito,
Tlaxcala-Puebla and Peñon-Ecatepec highways.
GA #100224v5
b)
HISTORY
Our company, Pinfra, emerged from the corporate restructuring and business reorganization (concurso
mercantil) of Grupo Tribasa, S.A. de C.V., which was founded in 1969 and became one of the largest infrastructure
companies in Mexico. As part of such restructuring, in 2003 our new management reached a definitive agreement
with all of our creditors, after which we were able to adopt a new business model focused on the promotion,
development and management of infrastructure projects.
In 2005, we relisted our shares on the BMV adopting our current name “Promotora y Operadora de
Infraestructura, S.A.B. de C.V.” a year later. We stabilized our balance sheet by securitizing several of our
concessions operated by our subsidiaries on a non-recourse basis, which allowed us to seize new business
opportunities, including investing in new concessions, increasing traffic of our existing concessions, investing in the
operation of a port terminal, optimizing our aggregate quarry for our asphalt and related products business and
reducing costs and corporate expenses. This strategy has allowed us to create substantial value for the Company and
our shareholders.
Using such strategy, between 2006 and 2014 we have consolidated a new business model, becoming a
developer and operator of infrastructure projects that generate growing and predictable cash flows. Based on this,
we have developed a long-term conservative approach that we believe allows us to plan ahead. In the last eight
years we believe this strategy has enabled us to increase the number of concessions in our portfolio, from eight in
2006 to 17 in 2014, representing a total of 25 toll roads and a port terminal.
We currently seek to achieve business advantage from our extensive experience in the construction,
management and ownership of toll road concessions. We have strengthened our assets and obtained new
concessions, creating a strong and diversified portfolio of investments with a solid long-term financial structure and
predictable cash flow that we believe will allow us to achieve sustained growth.
According to its bylaws, the Company’s term is indefinite.
The offices of the Company are located in Bosque de Cidros No. 173, Col. Bosques de las Lomas
Delegación Cuajimalpa, ZIP Code 05120, Mexico, Federal District; Telephone (55) 27890200.
In the past four years, we have invested in capital stock of PAPSA, our wholly owned subsidiary. PAPSA
is no longer holder of any concession due to a split-off dated November 4, 2013. As of December 31, 2014, the
capital stock of PAPSA was Ps.1,000.00. Vías Concesionadas de Carretera PAPSA is the new holder of the Paquete
Puebla concession.
GA #100224v5
GA #100224v5
c)
CONCESSIONS
The following table sets forth key data of the concessions we individually or jointly operate:
Concession
Securitized Toll Road
Concessions:
Year
granted
Initiated
operatio
ns
Expiration
Location
a. MMéxico-Marquesa
1989
1990
2049
b. MMarquesa Lerma
2013
—
2049
19. Peñón-Texcoco ............................1993
20. Tenango-Ixtapan de la
Sal ...............................................1994
21. Santa Ana-Altar ..........................
2006(17)
22. Atlixco-Jantetelco(18) ....................
a. Atlixco-San Bartolo
Cohuecán Stretch ..................1995
Non-securitized Toll Road
Concessions:
b. Cohuecán-Acteopan
Stretch ...................................2008
23.Pirámides-EcatepecPeñón (5) ....................................... —
a. Pirámides-Ecatepec
Stretch ...................................1991
b. Ecatepec-Peñón
Stretch ...................................2010
1994
2053
1995
2006
2054
2035
Mexico
City/State of
Mexico
Mexico City/
State of
Mexico
Mexico City/
State of
Mexico
State of
Mexico
State of
Mexico
Sonora
2003
2036
Puebla
2008
2036
Puebla
—
—
18. México-Toluca.............................
1991
—
(20)
2051
(20)
2051
Colima
24.Armería-Manzanillo ....................1990
1991
25.Zitácuaro-Lengua de
Vaca ............................................2007
2007
2037
Michoacán
26.Morelia-Aeropuerto.....................2007
27.San Luis Río ColoradoEstación Doctor ..........................2008
2008
2037
Michoacán
2009
2038
Sonora
28.Tlaxcala-Puebla ..........................2008
---
29.Tlaxcala-San Martín
Texmelucan .................................
1990(24)
30. ´Puebla Toll Roads(15)
2010
2041
Tlaxcala
Puebla
2012
2012
2042
Puebla
2012
2012
2042
Puebla
2012
c. Apizaco Huauchinango
31.Michoacan Toll Roads(26)............. —
a. Morelia beltway ....................2012
b. Uruapan beltway ...................2012
c. Patzcuaro-Uruapan
2012
toll road ................................
2012
2042
Puebla
—
—
—
—
2042
2042
—
2042
a. Vía Atlixcayotl
b. Virreyes - Teziutlan
Concession
revenues as
a % of total
revenues
for the year
ended
December
31, 2013
Status(15)
100%
19
57,124
100%
20.9%
30.97%
Operational(16)
15
—
100%
—
—
Operational(16)
16
28,730
100%
6.0%
8.97%
Operational(16)
40
5,067
100%
2.2%
3.23%%
73
3,884
100%
100%
2.7%
3.94%
Operational(16)
Operational(16)
38
3,702
100%
2.7%
3.95%
Operational(16)
11
—
100%
—
—
Operational(16)
(16)
100%
State of
Mexico
State of
Mexico
(21)
2050
Road
Length
(km)
Concession
revenues as
a % of total
ADTV for
revenues for
the year
the year
ended Percentage
ended
December
owned
December
31, 2014
by us
31, 2014
— (23) Tlaxcala/Puebla
—
22
20,478
100%
7.0%
10.37%
22
—
100%
—
—
37
5,815
100%
6.6%
9.13
12
2,995
100%
0.5%
0.82
Operational
Construction
Operational(16)
Operational(16)
23
2,331
50%
—
—
48
435
100%
0.2%
0.55%
100%
—
—
100%
2.1%
3.25%
16
26
6,080
Operational(16)
Operational(16)
Construction
Operational(16)
19
17,924
100%
3.0%
4.39
61
3,663
100%
1.8%
2.47
63
2,761
100%
1.4%
2.02
Michoacán
Michoacán
Michoacán
64
25
—
—
25.2%
25.2%
—
—
—
—
Michoacán
47
7,821
25.2%
—
—
Operational(16)
Operational(16)
Operational(16)
—
Construction
Construction
Operational
Operational(16)
2012
2012
2042
Michoacán
59
5,258
25.2%
—
—
e. Nueva Italia -Lázaro
2012
Cárdenas toll road ................
32. SigloXXI
2013
33. Puebla Elevated
2014
Viaduct
2012
2042
Michoacán
157
3,196
25.2%
—
—
—
2043
Morelos
62
—
51%
—
—
Construction
---
---
Puebla
13
—
49%
—
—
Construction
d. Uruapan-Nueva Italia
GA #100224v5
Construction (16)
Other Concessions:
34. Altamira Port Terminal..............
1994(27)
1996
2036
Tamaulipas
Total in km
100%
10.5%
14.6%
Operational(28)
989
______________
(15)
As of the date of this offering memorandum.
(16)
“Operational” concession, with respect to any toll road concession, is a concession where vehicular traffic exists.
(17)
This concession was originally granted by the Mexican Federal Government to the State of Sonora.
(18)
This concession was originally granted for the Atlixco-San Bartolo-Cohuecán Stretch and thereafter extended to include the Cohuecán-Acteopan Stretch.
(19)
This concession was originally granted for the Pirámides-Ecatepec Stretch and thereafter extended to include the Ecatepec-Peñón Stretch.
(20)
The original term of this concession will expire on January 24, 2021 and, if necessary, may be extended for up to an additional 30-year period to allow PAPSA to
recover the total equity invested, and the corresponding return on such investment, in (i) the Pirámides-Ecatepec Stretch; (ii) the construction of the Ecatepec-Peñon
Stretch; (iii) the acquisition of the Tlaxcala-San Martín Texmelucan toll road; and (iv) any new investments that may be necessary pursuant to the Pirámides -EcatepecPeñon Toll Road Concession.
(21)
The original term of this concession will expire on November 8, 2020 and, if necessary, may be extended for up to an additional 30-year period to allow PAPSA to
recover the total equity invested, and the corresponding return on such investment, in (i) improvements made on the Armería-Manzanillo toll road and (ii) any new
investments that may be necessary pursuant to the Armería-Manzanillo Toll Road Concession.
(22)
The results of operations of this concession are not consolidated with our consolidated results of operations because we own only 50% of Purépecha, the
concessionaire under this concession. Our share of revenues from Purépecha is calculated in our consolidated financial state ments using the equity method.
(23)
The term of this concession is 30 years from the date in which the Tlaxcala-Puebla toll road initiates operations.
(24)
The original concessionaire was AUCAL, who assigned this concession to PAPSA on November 19, 2010.
(25)
Operations under this concession were initiated on November 23, 2010.
(26)
The results of operations of this concession are not consolidated with our consolidated results of operations because we own only 25.2% of Concesionaria de
Autopistas de Michoacán, the concessionaire under this concession. Our share of revenues from Concesionaria de Autopistas de Michoacán is calculated in our
consolidated financial statements using the equity method. Concesionaria de Autopistas de Michoacán began operating this co ncession on March 31, 2012.
(27)
The original concessionaire was API, who assigned this concession to IPM on April 19, 2006.
(28)
“Operational” concession, with respect to the Altamira Port Terminal, is a concession where maritime traffic exists.
Our Toll Road Concessions
We hold 17 concessions, representing a total of 25 toll roads (17 of which are in operation and 8 under
construction) and a port terminal. Such Toll Road Concessions are principally located in Mexico City and the States
of Mexico, Puebla, Tlaxcala, Michoacán, Colima, Sonora and Tamaulipas, some of the most populous areas of
Mexico, which together accounted for approximately 46.71% of the Mexican GDP 7 and 48.7% of the Mexican
population in 20108 We are responsible for the construction, operation, improvement and maintenance of the toll road
depending on the terms of the concession. In Mexico, both the Mexican Federal Government, through the SCT, and
state authorities grant the majority of toll road concessions. The toll road concession sector is a highly competitive
sector in which we have been successful, even though we have historically focused on a sector in which the
governments of various States in Mexico grant concessions pursuant to local legislation for the construction and
operation of roads and highways. State concessions are generally granted based on the model prepared by the SCT
and constitute a less competitive market. The term of our Toll Road Concessions is approximately 33 years.
A toll road concessionaire typically constructs or improves roads, in order to operate and maintain them in
good working condition. Concessionaires may transfer their rights and obligations to a third party but only with the
prior approval of the relevant governmental entities. Concession agreements generally include terms related to the
time of completion of the project, operation and maintenance requirements, standards under which the related works
are to be performed, the terms of government supervision, reserve funds to be maintained for maintenance services,
rights to be paid to the government and toll fees (including inflation adjustments). The concessionaire is responsible
for repairing roads on an as-needed basis during the term of the concession. In exchange for constructing, operating
and/or maintaining the roads, the concessionaire has the right to retain almost all the income (derived from toll fees)
from the operation of roads during the concession. Concessions may provide a minimum guaranteed rate of return
and the terms under which the concession may be terminated once the concessionaire reaches such rate of return. At
the end of the concession, the rights to operate the related roads and receive the toll fees revert to the government
without additional compensation to the concessionaire. Roads constructed and all improvements and repairs made
during the term of the concession remain as property of the government.
__________________________
7
Information published by the National Institute for Statistics and Geography in Mexico (Instituto Nacional de Estadística y Geografía) in the
Press Release No. 521/13 titled “Producto Interno Bruto por Entidad Federativa 2012”.
8
Information published by the National Institute for Statistics and Geography in Mexico (Instituto Nacional de Estadística y Geografía) in the
2010 Population and Housing Census.
GA #100224v5
Since December 1993, the maximum term of a road concession has been 30 years, pursuant to applicable
federal regulations. However, pursuant to such federal regulations, certain concessions contemplate the right of
concessionaires to request, under certain circumstances, an extension of the term of the concession with terms similar
to the original terms. Extensions may be requested in the following cases: (i) after the third phase of the original
concession term, if at the SCT’s discretion, additional investments to those established in the original terms of the
concessions are required; and (ii) at any time, when justified cases not attributable to the concessionaires occur such
as the failure to obtain or delays in obtaining the Release of Rights of Way. State regulation, in line with federal
regulation, establishes that the maximum term of a road concession is 30 years which, under certain circumstances,
may be extended for an additional term of 15 to 30 years upon filing a request to the corresponding State
Government. Terms of concessions generally include the condition that if traffic exceeds a certain agreed volume, the
term of the concession would be reduced or the related concessionaire would be required to pay a portion of the
profits resulting from the operation of the road to the government.
The government has the right to recall all assets related to the concession in the event of war, civil unrest,
threat to domestic peace or for economic or public interest reasons. In the case of recall, the law requires the
government to provide compensation to the concessionaire. Additionally, in the event that we fail to provide the
service under the terms described in the relevant concession, the authority may revoke the corresponding concession
without compensation to the concessionaire (unless the respective concession agreement provides otherwise). For
more information on the regulatory framework applicable to concessions in Mexico see “Mexican Infrastructure
Concessions and Regulation.”
All of our Toll Road Concessions and the Morelos Stretch are operated through Opervite, a consolidated
subsidiary. Opervite receives management fees in connection with its duties as operator thereunder. The revenues
received by Opervite and the related costs paid by each concessionaire to Opervite are eliminated upon the
consolidation of our financial statements with those of our subsidiaries.
We own an asphalt producing plant and a plant for the manufacture of concrete fences and other concrete
materials related to highway construction. Our sole supplier of asphalt in Mexico is PEMEX.
Securitized and Financed Toll Road Concessions
México-Toluca Toll Road Concession
On July 31, 1989, the Mexican Federal Government, through the SCT, granted our subsidiary, PACSA, a
concession for the construction, operation and maintenance of approximately 19 km of a four lane asphalt toll road
that runs from Constituyentes and Reforma in Mexico City, to La Venta in the State of Mexico (the “Mexico-Toluca
Toll Road Concession”). The México-Toluca toll road was the result of a modernization program implemented by the
Mexican Federal Government to improve interstate transportation.
The concession agreement was changed on July 23, 2013 in order to authorize the construction (i) of
improvement or interconnection works on feeder roads of the highway granted in concession or other federal roads
and (ii) works consisting of widening two lanes in both directions of the La Marquesa-Lerma de Villada section of
road, the México-Toluca (the “Marquesa-Lerma Stretch”) highway (the Initial Stretch and the Marquesa-Lerma
Stretch collectively referred to as the “México-Toluca Toll Road Concession”). In order to carry out construction of
the Marquesa-Lerma Stretch, an additional investment of Ps.3,500 million was needed. In order to allow us to
recover the additional investment and to compensate for the decrease in traffic volume in the Initial Stretch as a result
of the construction work for the Marquesa-Lerma Stretch, the term of the concession was extended for the MexicoToluca toll-road until July 31, 2049. According to the concession agreement, we are entitled to obtain a real annual
return of 12% of our investment charged against toll fees
The following map shows the location of the México-Toluca toll road:
GA #100224v5
Source: Google Maps.
All of PACSA’s outstanding capital stock and toll collections are pledged as collateral under a local Ps.6.4
billion securitization and are held by a management and security trust and an issuance trust, respectively. For a
description of the general terms of the securitization and the corresponding trust agreements, see “Management’s
Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—
Indebtedness.” The construction of the Marquesa-Lerma Stretch will be managed through an irrevocable
administration trust.
The 19 km of the México-Toluca toll road are in operation, through which approximately 56,999 vehicles
traveled per day in 2013 and 57,125 vehicles traveled per day in 2014. According to the records of Opervite, our
subsidiary that operates our toll roads, traffic on the México-Toluca toll road has historically consisted principally of
private cars.
The following table sets forth average daily traffic volume in respect of to the México-Toluca toll road for
the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Daily Traffic by Vehicle Equivalents:
México-Toluca Toll Road..............................
57,124
56,999
58,473
The following table sets forth average toll fees charged for vehicle equivalents with respect to the MéxicoToluca toll road for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Toll Fee Charged for Vehicle Equivalents (in Ps.):
México-Toluca Toll Road ..............................
68.87
65.41
62.82
Principal construction under the México-Toluca Toll Road Concession was completed in October 1990.
Remodeling works were carried out in the existing toll booths in 2014 and the works in the Marquesa-Lerma road
were continued.
Set forth below is a description of the main terms and conditions of the México-Toluca Toll Road
Concession:
GA #100224v5

Consideration. We have the obligation to pay the Mexican Federal Government 0.5% of the annual
gross toll income (excluding VAT) of the México-Toluca toll road as consideration for operating the
México-Toluca toll road. In addition, in December 1991, we contributed Ps.320.0 million to the SCT
to support unrelated state highway infrastructure improvement programs.

Toll Rates. We are entitled to collect the authorized toll rates established in the México-Toluca Toll
Road Concession. These rates are adjusted annually in January in accordance with the INPC in effect
at such time. In the event that the INPC increases by 5% or more during a six-month period from the
last adjustment, we have the right to correspondingly adjust the toll rate to compensate for inflation. In
addition, we are entitled to apply discounts on the authorized toll rates and to establish different toll
rates depending on the time of day, time of year and type of vehicle, as long as such toll rates do not
exceed the authorized toll rates.

Minimum Capital Stock Requirements. PACSA is required to maintain a minimum capital stock of
Ps.20.0 million. The outstanding capital stock of PACSA as of December 31, 2014 was Ps.1,674.2
million. As described above, all of the outstanding shares of PACSA’s capital stock have been
assigned to a management and security trust pursuant to a securitization transaction.

Release of Rights of Way. The México-Toluca Toll Road Concession required us to obtain the Release
of the Rights of Way for the project, which we obtained in July 1989, and requires us to consult the
SCT for approval before transferring the rights of way.

Operation and Maintenance Requirements. We are required to operate the toll road in accordance with
the México-Toluca Toll Road Concession and applicable laws. We are required to maintain an
operation and maintenance reserve in an amount of Ps.15 million, as of December 31, 2014, which is
adjusted on a monthly basis in accordance with fluctuations in the INPC. In addition, we are required
to maintain a performance bond to guarantee the compliance of our obligations under the concession.
As of December 31, 2014, such performance bond amounted to Ps.16.4 million. Additionally, in order
to ensure compliance with the obligations under the Marquesa-Lerma Stretch, a performance bond is
required in an amount equivalent to 3% of the total estimated construction cost for that stretch of road,
an amount which may be revised by the SCT every 3 years.

Concession Revenues and Investment Return. All toll road collections under the México-Toluca Toll
Road Concession are currently pledged to the México-Toluca Issuance Trust as collateral under a
securitization transaction. Once all the outstanding amounts owed under the México-Toluca
securitization are paid in full, we will be entitled to receive revenues from toll road collections during
the remaining term of this concession in an amount equal to 6.8 million UDIs.

Recall (rescate). In the event that the Mexican Federal Government recalls the México-Toluca Toll
Road Concession, we will be entitled to receive compensation from the Mexican Federal Government
pursuant to applicable law.

Revocation. The México-Toluca Toll Road Concession may be revoked in favor of the Mexican
Federal Government in the event that PACSA breaches the terms of the concession, including, for
example, if PACSA does not timely pay in full the total amount of the annual consideration to the
Mexican Federal Government, or does not adequately operate and preserve the toll road pursuant to the
terms of the concession. Additionally, the Marquesa-Lerma Stretch concession can be revoked if its
construction is not carried out as per that established in the concession agreement. Revocation of the
Initial Stretch construction is independent of the revocation of the Marquesa-Lerma Stretch and viceversa. PACSA is not entitled to receive any compensation as a result of the revocation of the
concession.

Termination. The Initial Stretch will terminate automatically upon, among other events: (i) expiration
of its term; (ii) by mutual agreement between the Federal Government and PACSA; (iii) revocation;
(iv) payment in full of the concession revenues payable under the México-Toluca Toll Road
GA #100224v5
Concession or (v) when payment of the following payment obligations are made: (a) the total amount
of preferred subordinated securities issued by the Initial Stretch Trust or any refinancing thereof; (b)
payment obligations to the provider of financial guarantee insurance of the preferred subordinated
securities issued by the Initial Stretch Trust; (c) the totality of the subordinated securities issued by the
Initial Stretch Trust or any refinancing thereof; (d) any financing contracted by PACSA relating to the
construction and operation of the Marquesa-Lerma Stretch; (e) investments made by PACSA pursuant
to the concession title; (f) investments made by PACSA for the construction of the Marquesa-Lerma
Stretch at a compounded monthly annual real rate of 12%; (g) the residual amounts of the Initial
Stretch Trust that PACSA is entitled to received plus the corresponding yield as set forth in the
concession title; (h) obligations to the other beneficiaries of the Initial Stretch Trust and, where
appropriate, of the trust that the Marquesa-Lerma Stretch receivables may have been contributed to;
and (vi) when each and all obligations or liabilities of the Initial Stretch trust, of the trust that the
Marquesa-Lerma Stretch receivables may have contributed to; or any other trust replacing them and to
which receivables from toll fees from the awarded toll road may have contributed to, are paid. In the
event of early termination, the Federal Government shall have the right to collect toll fees on the
Mexico-Toluca road, and the same shall be applied to the payment of any unpaid amount relating to
the securitization of the project.
Peñón-Texcoco Toll Road Concession
On May 18, 1993, the Government of the State of Mexico, and our wholly owned subsidiary CPAC, entered
into a concession rights assignment agreement (the “Peñón-Texcoco Assignment Agreement”) whereby the
Government of the State of Mexico assigned a concession granted by the Mexican Federal Government to repair an
existing stretch of road and construct, operate and maintain a 15.6 km four lane asphalt toll road that runs through the
State of Mexico (the “Peñón-Texcoco Toll Road Concession”). The Peñón-Texcoco Toll Road Concession currently
expires in 2053, due to several amendments negotiated with the SCT and the Government of the State of Mexico.
The following map shows the location of the Peñón-Texcoco toll road:
Source: Google Maps.
All of CPAC’s toll collections are pledged as collateral under a local Ps.1,119.1 million securitization and
are held by an issuance trust. For a description of the general terms of such securitization transaction and the
irrevocable issuance trust agreement, see “Management’s Discussion and Analysis of Financial Condition and Results
of Operations—Liquidity and Capital Resources—Indebtedness.”
The 15.6 km of the Peñón-Texcoco toll road are in full operation, through which approximately 29,424
vehicles traveled per day in 2013 and 28,730 vehicles traveled per day in 2014. According to the records of Opervite,
traffic on the Peñón-Texcoco toll road has historically consisted principally of private cars.
GA #100224v5
The following table sets forth traffic volume in respect of the Peñón-Texcoco toll road for the periods
indicated:
For the year ended December 31,
2014
2013
2012
Average Daily Traffic by Vehicle Equivalents:
Peñón-Texcoco Toll Road .............................
28,730
29,424
31,315
The following table sets forth average toll fees charged for vehicle equivalents in respect of the PeñónTexcoco toll road for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Toll Fee Charged for Vehicle Equivalents (in Ps.):
Peñón-Texcoco Toll Road .............................
39.19
36.68
29.69
Principal construction under the Peñón-Texcoco Toll Road Concession was completed in March 1994.
Currently there are no construction works in progress in connection with this concession, aside from routine major
and minor maintenance services.
Set forth below is a description of the main terms and conditions of the Peñón-Texcoco Toll Road
Concession:

Consideration. We have the obligation to pay 1.5% of the annual gross toll income (excluding VAT)
of the Peñón-Texcoco toll road as consideration for operating the Peñón-Texcoco toll road from which
0.5% shall be paid directly to the Government of the State of Mexico and 1.0% shall be paid to the
Mexican Federal Government. In addition, pursuant to the Peñón-Texcoco Assignment Agreement, we
paid Ps.150.0 million to the Government of the State of Mexico as consideration for the extension of
the concession’s term.

Toll Rates. We are entitled to collect the authorized toll rates established in the Peñón-Texcoco Toll
Road Concession. These rates are adjusted annually in January in accordance with the INPC in effect
at such time. In the event that the INPC increases by 5% or more during a six-month period from the
last adjustment, we have the right to correspondingly adjust the toll rate to compensate for inflation.
The toll rates may not be adjusted prior to three months following the last adjustment. In addition, we
are entitled to request from the Government of the State of Mexico adjustments to the authorized toll
rates upon the occurrence of certain extraordinary events.

Minimum Capital Stock Requirements. CPAC is required to maintain a minimum capital stock of
Ps.20.0 million. The outstanding capital stock of CPAC as of December 31, 2014 was Ps.367.1
million.

Release of Rights of Way. The Peñón-Texcoco Toll Road Concession required us to obtain the Release
of the Rights of Way for the project from the SCT, which we obtained in May 1993.

Construction Requirements. As part of the initial works required under the concession, we were
required to repair the existing toll road and construct an additional stretch of the Peñón-Texcoco toll
road. We also are required to construct an extension of two additional lanes in the event that the ADTV
during a 12-month period exceeds 42,000 vehicles. In addition, and once the concession revenues
related to the initial works are obtained, the Government of the State of Mexico may require us to
GA #100224v5
construct additional improvements and interconnection roads. This has not yet occurred. We are
permitted to engage third parties for any additional construction works.

Operation and Maintenance Requirements. We are required to operate the Peñón-Texcoco toll road
subject to the terms of the Peñón-Texcoco Toll Road Concession and applicable laws. We are required
to maintain an operation and maintenance reserve equal to 1.0% of the project’s total cost, which is
adjusted on an annual basis in accordance with fluctuations in the INPC. As of December 31, 2014
such maintenance reserve amounted to Ps.13.9 million. In addition, we are required to maintain a
performance bond to guarantee the compliance of our obligations under the concession. As of
December 31, 2014, such performance bond amounted to Ps.8.2 million.

Concession Revenues and Investment Return. All toll road collections under the Peñón-Texcoco Toll
Road Concession are currently pledged to the Peñón-Texcoco Issuance Trust as collateral under a
securitization transaction. Once all the outstanding amounts owed under the Peñón-Texcoco
securitization are paid in full, we will be entitled to receive revenues from toll road collections during
the remaining term of this concession in an amount equal to the total equity invested of the initial and
additional works performed under this concession, plus a Real Annual Rate of Return of 10.47%. In
the event that we do not recover the total equity invested plus the expected Real Annual Rate of
Return, we are entitled to request an extension of the concession for the term necessary to recover such
amounts.

Recall (rescate). We will be entitled to receive compensation if the Government of the State of Mexico
recalls the Peñón-Texcoco Toll Road Concession. This compensation from the Government of the
State of Mexico will be equal to the unrecovered total equity invested plus a Real Annual Rate of
Return of 10.47%.

Revocation. The Peñón-Texcoco Toll Road Concession may be revoked in favor of the Government of
the State of Mexico in the event that CPAC breaches the terms of the concession, including, for
example, if CPAC does not timely pay in full the total amount of the annual consideration to the
Mexican Federal Government and the Government of the State of Mexico, or does not adequately
operate and preserve the toll road pursuant to the terms of the concession. CPAC is not entitled to
receive any compensation from revocation of the concession.

Termination. The Peñón-Texcoco Toll Road Concession will terminate automatically upon, among
other events, expiration of its term or by the mutual agreement of CPAC and the Government of the
State of Mexico. In the event of early termination, the Mexican Federal Government is entitled to
receive the collection rights from the Peñón-Texcoco toll road, which shall be applied to the repayment
of any outstanding amounts owed under the securitization transaction.

Competing Projects. The Peñón-Texcoco Toll Road Concession establishes that the SCT may not
grant similar concessions for toll roads that could compete with the Peñón-Texcoco toll road. If the
SCT fails to comply with such obligation, we are entitled to receive compensation pursuant to
applicable law.
Tenango-Ixtapan de la Sal Toll Road Concession
On December 2, 1994, the Government of the State of Mexico, granted our subsidiary, ATISA, a concession
to construct the La Finca-Ixtapan de la Sal stretch as well as to operate and maintain approximately 47 km of a two
lane asphalt toll road (the “Tenango-Ixtapan de la Sal Toll Road Concession”). The Tenango-Ixtapan de la Sal toll
road connects the ring of cities bordering Mexico City to the south and facilitates transport of agricultural products
grown in the region. The Tenango-Ixtapan de la Sal Toll Road Concession expires in 2054, due to several
amendments negotiated with the Government of the State of Mexico. The following map shows the location of the
Tenango-Ixtapan de la Sal toll road:
GA #100224v5
Source: Google Maps.
All of ATISA’s toll collections are pledged as collateral under a local Ps.813.2 million securitization
transaction and are held by an issuance trust. For a description of the general terms of the securitization and the
irrevocable issuance trust agreements, see “Management’s Discussion and Analysis of Financial Condition and
Results of Operations—Liquidity and Capital Resources—Indebtedness.”
The 40 km of the Tenango-Ixtapan de la Sal toll road are in operation, through which approximately 5,344
vehicles traveled per day in 2013 and 5,067 vehicles traveled per day in 2014. According to the records of Opervite,
traffic on the Tenango-Ixtapan de la Sal toll road has historically consisted principally of private cars.
The following table sets forth traffic volume and other operating data in respect of the Tenango-Ixtapan de la
Sal toll road for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Daily Traffic by Vehicle Equivalents:
Tenango-Ixtapan de la Sal Toll Road .......
5,067
5,344
5,724
The following table sets forth average toll fees charged for vehicle equivalents in respect of the TenangoIxtapan de la Sal toll road for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Toll Fee Charged for Vehicle Equivalents (in Ps.):
Tenango-Ixtapan de la Sal Toll Road .......
80.25
72.67
66.56
Principal construction under the Tenango-Ixtapan de la Sal Toll Road Concession was completed on March
1995. Currently, we are not performing any construction works in connection with this concession, aside from the
routine major and minor maintenance services. However, the Government of the State of Mexico is constructing two
additional lanes which will be included in our concession.
Set forth below is a description of the main terms and conditions of the Tenango-Ixtapan de la Sal Toll Road
Concession:
GA #100224v5

Consideration. We are required to pay the Government of the State of Mexico 1.5% of the monthly
gross toll income (excluding VAT) of the Tenango-Ixtapan de la Sal toll road as consideration for
operating the Tenango-Ixtapan de la Sal toll road. Upon the grant of the extension to the term of this
concession, we paid Ps.180 million to the Government of the State of Mexico.

Toll Rates. We are entitled to collect the authorized toll rates established in the Tenango-Ixtapan de la
Sal Toll Road Concession. These rates are adjusted annually in January in accordance with the INPC
in effect at such time. In the event that the INPC increases by 10% or more from the last adjustment,
we have the right to correspondingly adjust the toll rate to compensate for inflation. In addition, we are
entitled to apply discounts on the authorized toll rates and to establish different toll rates depending on
the type of vehicle, as long as such toll rates do not exceed the authorized toll rates.

Minimum Capital Stock Requirements. ATISA is required to maintain a minimum capital stock of
Ps.20.0 million. The outstanding capital stock of ATISA as of December 31, 2014 was Ps.20.0 million.

Release of Rights of Way. The Tenango-Ixtapan de la Sal Toll Road Concession required us to obtain
the Release of the Rights of Way for the project from the Government of the State of Mexico, which
we obtained in December 1994.

Operation and Maintenance Requirements. We are required to operate the Tenango-Ixtapan de la Sal
toll road in accordance with the terms of the Tenango-Ixtapan de la Sal Toll Road Concession and
applicable laws. We are required to maintain a performance bond to guarantee the compliance of our
obligations under the concession. As of December 31, 2014, such performance bond amounted to
Ps.1.0 million.

Concession Revenues and Investment Return. All toll road collections under the Tenango-Ixtapan de la
Sal Toll Road Concession are currently pledged to the Tenango-Ixtapan de la Sal Issuance Trust as
collateral under a securitization transaction. Once all the outstanding amounts owed under the
Tenango-Ixtapan de la Sal securitization are paid in full, we will be entitled to receive revenues from
toll road collections during the remaining term of this concession in an amount equal to the total equity
invested. Upon termination of this concession and once we recover our total equity invested, the
Government of the State of Mexico will be entitled to receive any such amounts in excess.

Recall (rescate). We will be entitled to receive compensation if the Government of the State of Mexico
recalls Tenango-Ixtapan de la Sal Toll Road Concession. This compensation from the Government of
the State of Mexico will be equal to the unrecovered total equity invested.

Revocation. The Tenango-Ixtapan de la Sal Toll Road Concession may be revoked in favor of the
Government of the State of Mexico in the event that ATISA breaches the terms of the concession,
including, for example, if ATISA does not timely pay in full the total amount of the monthly
consideration to the Government of the State of Mexico, or does not adequately operate and preserve
the toll road pursuant to the terms of the concession. ATISA will be entitled to receive compensation
equal to the unrecovered total equity invested less any penalties derived as a result of the revocation.

Termination. The Tenango-Ixtapan de la Sal Toll Road Concession will terminate automatically upon,
among other events, the expiration of its term or the mutual agreement of ATISA and the Government
of the State of Mexico. In the event of early termination, the Mexican Federal Government is entitled
to receive the collection rights from the Tenango-Ixtapan de la Sal toll road, which shall be applied to
the repayment of any outstanding amounts owed under the securitization transaction.

Competing Projects. The Tenango-Ixtapan de la Sal Toll Road Concession establishes that the
Government of the State of Mexico may not grant similar concessions for toll roads that could compete
with the Tenango-Ixtapan de la Sal toll road. If the Government of the State of Mexico fails to comply
with such obligation, we are entitled to receive compensation pursuant to applicable law.
GA #100224v5
Atlixco-Jantetelco Toll Road Concession
On May 29, 1995, the Government of the State of Puebla, through the SCT, granted our subsidiary,
CONCEMEX (currently in a merger process with CPAC), a concession to construct, operate and maintain a 38 km
two lane asphalt toll road that runs from Atlixco to San Bartolo in the State of Puebla (the “Atlixco-San BartoloCohuecán Stretch”). On January 2, 2008 the Government of the State of Puebla added to our concession, 10.6 km of a
two lane toll road that runs from Cohuecán to Acteopan in the State of Puebla (the “Cohuecán-Acteopan Stretch” and
together with the Atlixco-San Bartolo-Cohuecán Stretch the “Atlixco-Jantetelco Toll Road Concession”). The
Atlixco-Jantetelco Toll Road Concession expires on February 24, 2036, due to several amendments negotiated with
the SCT and the Government of the State of Puebla.
The concession for the construction and operation of the Morelos Stretch was awarded to RCA, who then
signed an operating agreement with us, whereby the operation of the Morelos Stretch was awarded to us.
The following map shows the location of the Atlixco-Jantetelco toll road:
Source: Google Maps.
All of CONCEMEX’s toll collections from the Atlixco-San Bartolo-Cohuecán Stretch are pledged as
collateral under a local Ps.263.3 million securitization and held by an issuance trust. For a description of the general
terms of such securitization transaction and the irrevocable issuance trust agreements, see “Management’s Discussion
and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Indebtedness.”
The 48.6 km of the Atlixco-Jantetelco Toll Road Concession are in operation, through which approximately
3,563 vehicles traveled per day in 2013 and 3,702 vehicles traveled per day in 2013. According to the records of
Opervite, traffic on the Atlixco-Jantetelco toll road has historically consisted principally of private cars.
The following table sets forth traffic volume and other operating data in respect of the Atlixco-Jantetelco toll
road for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Daily Traffic by Vehicle Equivalents:
Atlixco-Jantetelco Toll Road .......................
3,702
3,563
3,614
The following table sets forth average toll fees charged for vehicle equivalents in respect of the AtlixcoJantetelco toll road for the periods indicated:
For the year ended December 31,
GA #100224v5
2014
2013
2012
Average Toll Fee Charged for Vehicle Equivalents (in Ps.):
Atlixco-Jantetelco Toll Road .......................
156.16
149.83
138.43
Principal construction under the Atlixco-Jantetelco Toll Road Concession was completed on December
2003. Currently there are no construction works in progress in connection with this concession, aside from routine
major and minor maintenance services.
Set forth below is a description of the main terms and conditions of the Atlixco-Jantetelco Toll Road
Concession:

Consideration. We have the obligation to pay the State of Puebla 1.0% of the biannual gross toll
income (excluding VAT) of the Atlixco-Jantetelco toll road as consideration for operating the AtlixcoJantetelco toll road. Upon the grant of the Cohuecán-Acteopan Stretch, we were obligated to pay the
State of Puebla Ps.115 million as consideration for the additional concession.

Toll Rates. We are entitled to collect the authorized toll rates established in the Atlixco-Jantetelco Toll
Road Concession. These rates may be adjusted at any time when the INPC in effect at such time,
increases by 5% or more. In addition, we are entitled to request the Government of the State of Puebla
adjustments to the authorized toll rates upon the occurrence of certain extraordinary events.

Minimum Capital Stock Requirements. CONCEMEX is required to maintain a minimum capital stock
of Ps.20.0 million representing 3% of the estimated total investment. CONCEMEX is currently on a
merger process with CPAC by virtue of which it will be the holder of this concession. The corporate
capital of CPAC as of December 31, 2014 amounts to Ps.367.1 million.

Release of Rights of Way. The Atlixco-Jantetelco Toll Road Concession required us to obtain the
Release of the Rights of Way for the project from the Government of the State of Puebla, which we
obtained in 2011.

Construction Requirements. We are required to construct an extension of two additional lanes in the
event the ADTV during a 12-month period exceeds 11,000 vehicles. This has not yet occurred. We are
permitted to engage third parties for any additional construction works.

Operation and Maintenance Requirements. We are required to operate the Atlixco-Jantetelco toll road
subject to the terms of the Atlixco-Jantetelco Toll Road Concession and applicable laws. We were
required to establish (i) a reserve equal to Ps.0.24 million for minor maintenance services; and (ii) a
reserve equal to Ps.0.65 million for major maintenance services, which up to December 31, 2014
arised to Ps.0.24 million and Ps. 0.66 million, respectively. In addition, we are required to maintain a
performance bond to guarantee the due payment of the consideration under the Cohuecán-Acteopan
Stretch. As of December 31, 2014, such performance bond amounted to Ps.0.4 million.

Concession Revenues and Investment Return. All toll road collections under the Atlixco-Jantetelco
Toll Road Concession are currently pledged to the Atlixco-Jantetelco Issuance Trust as collateral under
a securitization transaction. Once all the outstanding amounts owed under the Atlixco-Jantetelco
securitization are paid in full, we will be entitled to receive revenues from toll road collections during
the remaining term of this concession in an amount equal to the total equity invested. In the event that
we do not recover the total equity invested, we are entitled to request an extension of the concession
for the term necessary to recover such amounts.

Recall (rescate). We will be entitled to receive compensation if the Government of the State of Puebla
recalls the Atlixco-Jantetelco Toll Road Concession. This compensation from the Government of the
State of Puebla will be equal to the amount of any financing obtained in connection with the AtlixcoJantetelco Toll Road Concession, including accrued interest and the unrecovered total equity invested.
GA #100224v5
In the event that the recall of the concession is due to causes attributable to us, we will only be entitled
to compensation from the Government of the State of Puebla equal to the unrecovered total equity
invested adjusted to the fluctuations in the INPC.

Revocation. The Atlixco-Jantetelco Toll Road Concession may be revoked in favor of the Government
of the State of Puebla in the event that CONCEMEX breaches the terms of the concession, including,
for example, if CONCEMEX does not timely pay in full the total amount of the biannual consideration
to the Government of the State of Puebla or does not adequately operate and preserve the toll road
pursuant to the terms of the concession. CONCEMEX is entitled to receive compensation equal to the
unrecovered total equity invested adjusted to the fluctuations in the INPC.

Termination. The Atlixco-Jantetelco Toll Road Concession will terminate automatically upon, among
other events (i) the expiration of its term; (ii) the mutual agreement of CONCEMEX and the
Government of the State of Puebla; or (iii) our recovery of our investment in full. In the event of early
termination, the Government of the State of Puebla is entitled to receive the collection rights from the
Atlixco-Jantetelco toll road, which shall be applied to the repayment of any outstanding amounts owed
under the securitization transaction.

Competing Projects. The Atlixco-Jantetelco Toll Road Concession establishes that the Government of
the State of Puebla may not grant similar concessions for toll roads that will run and could compete
with the Atlixco-Jantetelco toll road. If the Government of the State of Puebla fails to comply with
such obligation, we are entitled to receive compensation pursuant to applicable law.
Santa Ana-Altar Toll Road Concession
On August 1, 2006, the Government of the State of Sonora, and our wholly owned subsidiary, Zonalta,
entered into a construction, modernization, operation, conservation, maintenance and transfer agreement whereby the
Government of the State of Sonora subcontracted Zonalta to operate and maintain a total of approximately 73 km of a
two lane asphalt and a two lane concrete toll road in Sonora, México in exchange for the collection rights derived
from the concession (the “Santa Ana-Altar Toll Road Concession”), without granting the underlying concession. On
July 9, 2011 the Government of the State of Sonora assigned all rights under this concession to Zonalta. The Santa
Ana-Altar Toll Road Concession expires on August 16, 2035. The following map shows the location of the Santa
Ana-Altar toll road:
Source: Google Maps.
All of Zonalta’s toll collections are pledged as collateral under a local Ps.1,772 million securitization and
held by an issuance trust. For a description of the general terms of such securitization transaction and the irrevocable
issuance trust agreements, see “Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Liquidity and Capital Resources—Indebtedness.”
On June 27, 2012, as part of a restructuring of our debt profile, we prepaid Ps.389.9 million of our
obligations under the securitization in respect of the Santa Ana-Altar Toll Road Concession and contributed Ps.10.1
million for major maintenance, resulting in Ps.1,616.9 million of indebtedness outstanding under three series: (i) 50%
preferred indebtedness; (ii) 20% subordinated indebtedness; and (iii) 30% convertible into preferred indebtedness.
Furthermore, on October 31, 2012 the SCT authorized an amount of up to Ps.400 million to the concessionaire to pay
GA #100224v5
for the project of widening from two to four lanes the “Altar-Pitiquito” highway, a highway awarded on concession to
the Company and the widening from two to four lanes of the Pitiquito-Caborca highway.
The 73 km of the Santa Ana-Altar toll road are in operation through which approximately 3,877 vehicles
traveled per day in 2013 and increased to 3,884 vehicles traveled per day in 2014. According to the records of
Opervite, traffic on the Santa Ana-Altar toll road has historically consisted of commercial vehicles and private cars.
The following table sets forth traffic volume and other operating data in respect of the Santa Ana-Altar toll
road for the periods indicated:
For the year ended December 31,
2014
Average Daily Traffic by Vehicle
Equivalents:
Santa Ana-Altar Toll Road .........................
2013
3,884
2012
3,877
3,143
The following table sets forth average toll fees charged for vehicle equivalents in respect of the Santa AnaAltar toll road for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Toll Fee Charged for Vehicle Equivalents (in Ps.):
Santa Ana-Altar Toll Road ........................
132.75
124.64
96.82
Principal construction under the Santa Ana-Altar Toll Road Concession was completed in August 2006.
During 2014, extension works from 2 to 4 lanes of 18.4 km of the Altar-Pitiquito highway and extension works from
2 to 4 lanes of 8.5 km of the Pitiquito-Caborca highway were made.
Set forth below is a description of the main terms and conditions of the Santa Ana-Altar Toll Road
Concession:

Consideration. We are required to pay the Mexican Federal Government 0.5% of the annual gross toll
income (excluding VAT) of the Santa Ana-Altar toll road as consideration for operating the Santa
Ana-Altar toll road. In addition, we carried out the necessary construction needed to modernize
10.5km in width of the Santa Ana-Altar stretch.

Toll Rates. We are entitled to collect the authorized toll rates established in the Santa Ana-Altar Toll
Road Concession. These rates are adjusted annually in January in accordance with the INPC in effect
at such time. In addition, at any time when the INPC increases by 5% or more, we have the right to
correspondingly adjust the toll rate to compensate for inflation. The toll rates may not be adjusted prior
to three months following the last adjustment. In addition, we are entitled to apply discounts on the
authorized toll rates and to establish different toll rates depending on the time of day, time of year and
type of vehicle, as long as such toll rates do not exceed the authorized toll rates.

Minimum Capital Stock Requirements. This concession currently does not provide a minimum capital
stock requirement. As of December 31, 2014, the Company’s corporate capital amounted to Ps.$51.4
million.

Release of Rights of Way. The Release of the Rights of Way was already obtained when the
Government of the State of Sonora assigned the Santa Ana-Altar Toll Road Concession to Zonalta.
GA #100224v5

Operation and Maintenance Requirements. We are required to operate the toll road according to the
terms established in the Santa Ana-Altar Toll Road Concession and applicable laws. Previously, we
were required to establish an operation and maintenance reserve and as a result of a resolution adopted
by the technical committee, we no longer maintain such a reserve. By December 31, 2014 there was no
amount in the reserve as the technical committee agreed to employ it for the major maintenance fund.

Concession Revenues and Investment Return. All toll road collections under the Santa Ana-Altar Toll
Road Concession are currently pledged to the Santa Ana-Altar Issuance Trust as collateral under a
securitization transaction. Once all the outstanding amounts owed under the Santa-Ana Altar
securitization are paid in full, we will be entitled to receive all revenues from toll road collections
during the remaining term of this concession in an amount equal to the total equity invested.

Recall (rescate). In the event that the Mexican Federal Government recalls the Santa Ana-Altar Toll
Road Concession, we will be entitled to receive compensation from the Mexican Federal Government
pursuant to applicable law.

Revocation. The Santa Ana-Altar Toll Road Concession may be revoked in favor of the Mexican
Federal Government in the event that Zonalta breaches the terms of the concession, including, for
example, if Zonalta does not timely pay in full the total amount of the annual consideration, or does not
adequately operate and preserve the toll road pursuant to the terms of the concession. Zonalta is not
entitled to receive any compensation as a result of the revocation of the concession.

Termination. The Santa Ana-Altar Toll Road Concession will terminate automatically upon, among
other events, the expiration of its term or the mutual agreement of Zonalta and the Mexican Federal
Government. In the event of early termination, the Mexican Federal Government is entitled to receive
the collection rights from the Santa Ana-Altar toll road, which shall be applied to the repayment of any
outstanding amounts owed under the securitization transaction.
Non-securitized Toll Road Concessions
Pirámides-Ecatepec-Peñón Toll Road Concession
On January 25, 1991, the Mexican Federal Government, through the SCT, granted PAPSA (currently
VCCPacífico) a concession to construct, operate and maintain a 22.2 km four lane asphalt toll road that runs through
Mexico City and the State of Mexico (the “Pirámides-Ecatepec Stretch”). On March 31, 2009 our concession was
amended to include an extension of 17.5 km of a four lane asphalt toll road (the “Ecatepec-Peñón Stretch” and
together with the Pirámides-Ecatepec Stretch, the “Pirámides-Ecatepec-Peñón Toll Road Concession”). The
Pirámides-Ecatepec-Peñón Toll Road Concession expired on January 24, 2021 and could be extended for up to an
additional 30 years in the event that such term is needed in order for PAPSA to recover the total equity invested in (i)
the Pirámides-Ecatepec Stretch; (ii) the construction of the Ecatepec-Peñón Stretch; (iii) acquisition of the TlaxcalaSan Martín Texmelucan toll road; and (iv) any new investments that may be necessary pursuant to the PirámidesEcatepec-Peñón Toll Road Concession. On February 25, 2011, the Federal Government extended the PirámidesEcatepec-Peñón Toll Road Concession for an additional period of 30 years as a result of a settlement agreement
reached by the Federal Government with respect to a trial relating to the Tlaxcala-San Martin Texmelucan Toll Road
Concession.
Originally, the concession for the Pirámides-Ecatepec Stretch was awarded to PACSA. On April 6, 2006,
the SCT authorized PACSA to assign all of its rights from the Pirámides-Ecatepec Stretch to CEPSA. In February
2010, the SCT authorized the merger of CEPSA with PAPSA, with PAPSA being the highway concessionaire from
February 2010 to December 2013. The SCT approved the division of PAPSA for tax purposes as of January 1, 2014
in order to form the VCCPAPSA and VCCPacífico companies. Concession rights and obligations for the PirámidesEcatepec-Peñón Highway, the Armería-Manzanillo Highway and the Tlaxcala-San Martín Texmelucan Highway
were transferred to the VCCPacífico company.
GA #100224v5
The following map shows the location of the Pirámides-Ecatepec-Peñón toll road:
Source: Google Maps.
The collection rights derived from the Pirámides-Ecatepec-Peñón Toll Road Concession were assigned to a
trust created under a trust agreement dated April 1, 2010, between PAPSA as settlor and beneficiary, and CIBANCO,
S.A. Institución de Banca Múltiple, División Fiduciaria, as trustee (the “Pirámides-Ecatepec-Peñón Trust”). The main
purpose of the Pirámides-Ecatepec-Peñón Trust is to administer (i) all payments in connection with the PirámidesEcatepec-Peñón Toll Road Concession and (ii) any financings entered into in connection with such toll road,
including, without limitation, a securitization of its collection rights.
Only 22.2 km of the Pirámides-Ecatepec Stretch are in operation through which approximately 20,478
vehicles traveled per day in 2014 and 20,169 vehicles traveled per day in 2013. According to the records of Opervite,
traffic on the Pirámides-Ecatepec Stretch has historically consisted principally of private cars.
The construction of the 17.5 km of the Ecatepec-Peñón Stretch is subject to the publication of a report on the
environmental impact of the toll road and the Release of the Rights of Way. The estimated investment amount for the
construction of the Ecatepec-Peñón Stretch is Ps.1,700 million.
The following table sets forth traffic volume and other operating data in respect of the Pirámides-Ecatepec
Stretch for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Daily Traffic by Vehicle Equivalents:
Pirámides-Ecatepec Toll Road .....................
20,478
20,169
21,125
The following table sets forth average toll fees charged for vehicle equivalents in respect of the PirámidesEcatepec Stretch for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Toll Fee Charged for Vehicle Equivalents (in Ps.):
Pirámides-Ecatepec Toll Road.....................
64.12
62.14
54.82
Principal construction of the Pirámides-Ecatepec Stretch was completed in December 1991. By midNovember of 2014, construction works of the first 4.5 km began. We have obtained the Release of Rights of Way
only with respect to 15.64 km (92%) of the total 17 km of the Ecatepec-Peñón Stretch and we are currently
negotiating for the Release of Rights of Way for six km of this toll road.
GA #100224v5
Set forth below is a description of the main terms and conditions of the Pirámides-Ecatepec-Peñón Toll
Road Concession:

Consideration. We are required to pay the Mexican Federal Government 0.5% of the annual gross toll
income (excluding VAT) for the Pirámides-Ecatepec-Peñón toll road as consideration for operating the
Pirámides-Ecatepec-Peñón toll road. On December 17, 1992, PACSA was required to pay PAPSA, as
concessionaire of the Armería-Manzanillo Toll Road Concession, Ps.305.3 million to prepay debts
related to such concession in exchange for an extension of the term of the Pirámides-Ecatepec-Peñón
Toll Road Concession.

Toll Rates. We are entitled to collect the authorized toll rates established in the Pirámides-EcatepecPeñón Toll Road Concession. These rates are adjusted biannually in accordance with the INPC in
effect at such time. In addition, at any time when the INPC increases by 5% or more, we have the right
to correspondingly adjust the toll rate to compensate for inflation.

Minimum Capital Stock Requirements. VCCPacífico is required to maintain a minimum capital stock
of Ps.10.0 million. The outstanding capital stock of P VCCPacífico as of December 31, 2014 was
Ps.2,662.2 million.

Release of Rights of Way. The Pirámides-Ecatepec-Peñón Toll Road Concession required us to obtain
the Release of the Rights of Way for the projects jointly with the Mexican Federal Government. On
April 6, 2006, we established a trust into which indemnity payments related to the Release of the
Rights of Way of the Pirámides-Ecatepec Stretch were contributed up to such date. We have obtained
the Release of Rights of Way only with respect to 15.64 km (92%) of the total 17 km of the EcatepecPeñón Stretch and we are currently negotiating for the Release of Rights of Way for this toll road.

Construction Requirements. As part of the works required under the concession, we are required to
construct the Ecatepec-Peñón Stretch and submit any modification to the investment plan (plan
financiero) of the Ecatepec-Peñón Stretch to the Mexican Federal Government for authorization. The
plans, projects and any transactions relating to the construction of the Ecatepec-Peñón Stretch are
subject to the supervision of the Mexican Federal Government. The cost of such supervision shall be
borne by us. We are permitted to engage third parties for the construction of the project.

Operation and Maintenance Requirements. We are entitled to operate the road according to the terms
established in the Pirámides-Ecatepec-Peñón Toll Road Concession and according to relevant laws.
We are required to maintain an operation and maintenance reserve of Ps.1.5 million, which amounted
to Ps.1.6 million by December 31, 2014. In addition, we are required to maintain a performance bond
to guarantee the compliance of our obligations under the concession. As of December 31, 2014, such
performance bond amounted to Ps.0.8 million.

Concession Revenues and Investment Return. We are entitled to receive revenues from toll road
collections during the term of this concession in an amount equal to the total equity invested of the
initial and additional works performed under this concession. All toll road collections under the
Pirámides-Ecatepec-Peñón Toll Road Concession are managed through the Pirámides-Ecatepec-Peñón
Trust.

Recall (rescate). In the event that the Mexican Federal Government recalls the Pirámides-EcatepecPeñón Toll Road Concession, we will be entitled to receive compensation from the Mexican Federal
Government pursuant to applicable law.

Revocation. The Pirámides-Ecatepec-Peñón Toll Road Concession may be revoked in favor of the
Mexican Federal Government in the event that VCCPacífico breaches the terms of the concession,
including, for example, if VCCPacífico does not timely pay in full the total amount of the annual
consideration to the Mexican Federal Government, or does not adequately operate and preserve the toll
GA #100224v5
road pursuant to the terms of the concession. VCCPacífico is not entitled to receive any compensation
as a result of the revocation of the concession.

Termination The Pirámides-Ecatepec-Peñón Toll Road Concession will terminate automatically upon,
among other events, the expiration of its term or the mutual agreement of VCCPacífico and the
Mexican Federal Government. In the event of early termination, VCCPacífico is entitled to receive the
total equity invested plus the Real Annual Rate of Return as compensation.

Competing Projects. The Pirámides-Ecatepec-Peñón Toll Road Concession establishes that the
Mexican Federal Government may not grant similar concessions for toll roads that could compete with
the Pirámides-Ecatepec-Peñón toll road. In the event the Mexican Federal Government fails to comply
with such obligation, we are entitled to receive compensation pursuant to applicable law.
Armería-Manzanillo Toll Road Concession
On November 9, 1990, the Mexican Federal Government, through the SCT, granted us through our
subsidiary, PAPSA (currently VCCPacífico), a concession to construct, operate and maintain a 37 km four lane
asphalt toll road that runs from Colima to Manzanillo (the “Armería-Manzanillo Toll Road Concession”). The
Armería-Manzanillo Toll Road Concession, due to several amendments negotiated with the Mexican Federal
Government, expires on November 8, 2020 and could be extended for up to an additional 30 years to allow PAPSA to
recover the total equity invested in (i) improvements made on the Armería-Manzanillo toll road and (ii) any new
investments that may be necessary pursuant to the Armería-Manzanillo Toll Road Concession. This expiration date
was determined by the Mexican Federal Government as a result of a lawsuit filed in connection with the Tlaxcala-San
Martín Texmelucan Toll Road Concession, see “—Tlaxcala-San Martín Texmelucan Toll Road Concession”.
The SCT approved PAPSA’s spin-off for tax purposes effective January 1, 2014, resulting in the creation of
VCCPAPSA and VCCPacífico. Concession rights and obligations for the Pirámides-Ecatepec-Peñón Highway, the
Armería-Manzanillo Highway and the Tlaxcala-San Martín Texmelucan Highway were transferred to VCCPacífico.
The following map shows the location of the Armería-Manzanillo toll road:
Source: Google Maps.
The collection rights derived from the Armería Manzanillo Toll Road Concession were assigned to a trust
created under a trust agreement dated April 1, 2010, among PAPSA as settlor and beneficiary, and CIBANCO, S.A.
Institución de Banca Múltiple, División Fiduciaria (the “Armería-Manzanillo Trust”). The main purpose of the
Armería-Manzanillo Trust to administer (i) all payments in connection with the Armería Manzanillo Toll Road
Concession and (ii) any financings entered into in connection with such toll road, including, without limitation, a
securitization of its collection rights.
GA #100224v5
The 47 km of the Armería-Manzanillo toll road are in operation through which approximately 5,606 vehicles
traveled per day in 2013 and 5,815 vehicles traveled per day during 2014.
The following table sets forth traffic volume and other operating data in respect of the Armería-Manzanillo
toll road for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Daily Traffic by Vehicle Equivalents:
Armería-Manzanillo Toll Road ...................
5,815
5,606
5,805
The following table sets forth average toll fees charged for vehicle equivalents in respect of the ArmeríaManzanillo toll road for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Toll Fee Charged for Vehicle Equivalents (in Ps.):
Armería-Manzanillo Toll Road ..................
215.20
198.45
185.08
Principal construction under the Armería-Manzanillo Toll Road Concession was completed in July 1991.
Currently, there are no construction works in progress in connection with this concession, aside from routine major
and minor maintenance services.
Set forth below is a description of the main terms and conditions of the Armería-Manzanillo Toll Road
Concession:

Consideration. We are required to pay the Mexican Federal Government 0.5% of the annual gross toll
income (excluding VAT) of the Armería-Manzanillo toll road as consideration for operating the
Armería-Manzanillo toll road.

Toll Rates. We are entitled to collect the authorized toll rates established in the Armería-Manzanillo
Toll Road Concession. These rates are adjusted biannually in accordance with the INPC in effect at
such time. In addition, at any time when the INPC increases by 5% or more, we have the right to
correspondingly adjust the toll rate to compensate for inflation. We are entitled to request adjustments
to the authorized toll rates from the Mexican Federal Government upon the occurrence of certain
extraordinary events. In addition, we are entitled to apply discounts on the authorized toll rates and to
establish different toll rates depending on the time of day, time of year and type of vehicle, as long as
such toll rates do not exceed the authorized toll rates.

Minimum Capital Stock Requirements. VCCPacífico is required to maintain a minimum capital stock
of Ps.20.0 million. The outstanding capital stock of VCCPacífico as of December 31, 2014 was
Ps.2,662.2 million.

Release of Rights of Way. The Armería-Manzanillo Toll Road Concession required us to obtain the
Release of the Rights of Way for the project from the SCT, which we obtained in September 1990.

Operation and Maintenance Requirements. We are required to operate the Armería-Manzanillo toll
road according to the terms established in the Armería-Manzanillo Toll Road Concession and
applicable laws. We are required to maintain an operation and maintenance reserve of Ps.1.45 million,
which amounted to Ps.1.47 million by December 31, 2014. In addition, we are required to maintain a
GA #100224v5
performance bond to guarantee the compliance of our obligations under the concession. As of
December 31, 2014, such performance bond amounted to Ps.2.8 million.

Concession Revenues and Investment Return. We are entitled to receive revenues from toll road
collections during the remaining term of this concession in an amount equal to the total equity
invested. All toll road collections under the Armería-Manzanillo Toll Road Concession are managed
through the Armería-Manzanillo Trust.

Recall (rescate). In the event that the Mexican Federal Government recalls the Armería-Manzanillo
Toll Road Concession, we will be entitled to receive compensation from the Mexican Federal
Government pursuant to applicable law.

Revocation. The Armería-Manzanillo Toll Road Concession may be revoked in favor of the Mexican
Federal Government in the event that VCCPacífico breaches the terms of the concession, including, for
example, if VCCPacífico does not timely pay in full the total amount of the annual consideration to the
Mexican Federal Government, or does not adequately operate and preserve the toll road pursuant to the
terms of the concession. VCCPacífico is not entitled to receive any compensation as a result of the
revocation of the concession.

Termination. The Armería-Manzanillo Toll Road Concession will terminate automatically upon,
among others things, the expiration of its term or the mutual agreement of VCCPacífico and the
Mexican Federal Government. VCCPacífico is entitled to receive the total equity invested plus the
Real Annual Rate of Return as compensation for the early termination of the concession.

Competing Projects. The Armería-Manzanillo Toll Road Concession establishes that the Mexican
Federal Government may not grant similar concessions for toll roads that could compete with the
Armería-Manzanillo toll road. If the Mexican Federal Government fails to comply with such
obligation, we are entitled to receive compensation pursuant to applicable law.
Zitácuaro-Lengua de Vaca Toll Road Concession
On November 9, 2007, the Government of the State of Michoacán granted us through our subsidiary,
Monarca (which is currently in a merger process with CPAC), a concession to construct, operate and maintain
approximately 11.8 km of a two lane asphalt toll road that runs through the State of Michoacán and the State of
México, (the “Zitácuaro-Lengua de Vaca Toll Road Concession”). The Zitácuaro-Lengua de Vaca Toll Road
Concession expires on November 8, 2037. The following map shows the location of the Zitácuaro-Lengua de Vaca
toll road:
Source: Google Maps.
The collection rights derived from the Zitácuaro-Lengua de Vaca Toll Road Concession were assigned to a
trust created under an irrevocable, administration and source of payment trust agreement (Contrato de Fideicomiso
Irrevocable de Administración y Fuente de Pago) dated October 30, 2007, between Monarca, as settlor and
beneficiary, and HSBC México, S.A. Institución de Banca Múltiple, Grupo Financiero HSBC, División Fiduciaria, as
trustee (as substituted by a substitution agreement dated October 5, 2009 between the parties to the irrevocable,
GA #100224v5
administration and source of payment trust agreement and Banco Invex, S.A., Institución de Banca Múltiple, Invex
Grupo Financiero, Fiduciario) (the “Zitácuaro-Lengua de Vaca Trust”). The main purpose of the Zitácuaro-Lengua
de Vaca Trust is to administer (i) all payments in connection with the Zitácuaro-Lengua de Vaca Toll Road
Concession and (ii) any financings entered into in connection with such toll road, including, without limitation, a
securitization of its collection rights.
The 11.8 km of the Zitácuaro-Lengua de Vaca toll road are in operation with four manual-collection lanes,
through which approximately 3,131 vehicles traveled per day in 2013 and 2,995 vehicles traveled per day in 2014.
According to the records of Opervite, traffic on the Zitácuaro-Lengua de Vaca toll road has historically consisted
principally of private cars.
The following table sets forth traffic volume and other operating data in respect of the Zitácuaro-Lengua de
Vaca toll road for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Daily Traffic by Vehicle Equivalents:
2,995
Zitácuaro-Lengua de Vaca Toll Road .........
3,131
3,165
The following table sets forth average toll fees charged for vehicle equivalents in respect of the ZitácuaroLengua de Vaca toll road for the periods indicated:
For the year ended December 31,
2014
Average Toll Fee Charged for
Vehicle Equivalents (in Ps.):
Zitácuaro-Lengua de Vaca Toll Road .........
32.68
2013
31.39
2012
30.15
Principal construction under the Zitácuaro-Lengua de Vaca Toll Road Concession was completed by the
date in which the Government of the State of Michoacán granted Monarca the concession. Currently, there are no
construction works in progress in connection with this concession, aside from the routine major and minor
maintenance services.
Set forth below is a description of the main terms and conditions of the Zitácuaro-Lengua de Vaca Toll Road
Concession:

Consideration. We are required to pay the Government of the State of Michoacán 0.5% of the monthly
gross toll income (excluding VAT) of the Zitácuaro-Lengua de Vaca toll road as consideration for
operating the Zitácuaro-Lengua de Vaca toll road. As initial consideration, we paid Ps.130.2 million to
the State of Michoacán.

Toll Rates. We are entitled to collect the authorized toll rates established in the Zitácuaro-Lengua de
Vaca Toll Road Concession. These rates are adjusted annually in January in accordance with the INPC
in effect at such time. In the event that the INPC increases by 6% or more from the last adjustment, we
have the right to correspondingly adjust the toll rate to compensate for inflation. In addition, every four
months we are entitled to apply different discounts on the authorized toll rates and to establish different
toll rates depending on the time of day, time of year and type of vehicle, to maximize the ZitácuaroLengua de Vaca Toll Road Concession revenues, as long as such toll rates do not exceed the
authorized toll rates.
GA #100224v5

Minimum Capital Stock Requirements. The Concessionaire is required to maintain a minimum capital
stock of Ps.26 million. Monarca is on a merging process with CPAC by means of which the latter will
be the holder of this concession. The outstanding capital stock of CPAC as of December 31, 2014 was
Ps.367.1 million.

Release of Rights of Way. The Release of the Rights of Way was already obtained when the
Government of the State of Michoacán granted Monarca the Zitácuaro-Lengua de Vaca Toll Road
Concession.

Operation and Maintenance Requirements. We are entitled to the operation of the Zitácuaro-Lengua de
Vaca toll road according to the terms of the Zitácuaro-Lengua de Vaca Toll Road Concession and
relevant law.

Concession Revenues and Investment Return. We are entitled to receive revenues from toll road
collections during the remaining term of this concession in an amount equal to the total equity
invested. All toll road collections under the Zitácuaro-Lengua de Vaca Toll Road Concession are
managed through the Zitácuaro-Lengua de Vaca Trust.

Recall (rescate). In the event that the Government of the State of Michoacán recalls the ZitácuaroLengua de Vaca Toll Road Concession, we will be entitled to receive compensation from the Mexican
Federal Government equal to the unrecovered total equity invested.

Revocation. The Zitácuaro-Lengua de Vaca Toll Road Concession may be revoked in favor of the
Government of the State of Michoacán in the event that Monarca breaches the terms of the concession,
including, for example, if Monarca does not timely pay in full the total amount of the monthly
consideration to the Government of the State of Michoacán, or does not adequately operate and
preserve the toll road pursuant to the terms of the concession. Monarca is entitled to receive as
compensation, the unrecovered total equity invested as a result of the revocation of the concession.

Termination. The Zitácuaro-Lengua de Vaca Toll Road Concession will terminate automatically upon,
among other events, the expiration of its term or the mutual agreement of Monarca and the
Government of the State of Michoacán. In the event of early termination, Monarca is entitled to receive
compensation equal to the unrecovered total equity invested.

Competing Projects. The Zitácuaro-Lengua de Vaca Toll Road Concession establishes that the
Government of the State of Michoacán is entitled to grant similar concessions even if it affects the
economic performance of Monarca; in which case Monarca will be entitled to compensation by
submitting documentation evidencing (i) the decrease in the traffic volume, (ii) that such decrease has
existed for a period of six months prior to the date in which the compensation is requested and (iii) that
such decrease has affected the concession revenues pursuant to financial statements audited by an
auditor appointed by the Government of the State of Michoacán and Monarca.
Morelia-Aeropuerto Toll Road Concession
On February 13, 2007, the Government of the State of Michoacán granted to Purépecha a concession to
construct, operate and maintain approximately a 22.6 km two lane asphalt toll road that runs through the State of
Michoacán (the “Morelia-Aeropuerto Toll Road Concession”). The Morelia-Aeropuerto Toll Road Concession
expires on February 12, 2037. The following map shows the location of the Morelia-Aeropuerto toll road:
GA #100224v5
Source: Google Maps.
We own 50% of Purépecha’s outstanding capital stock. The remaining 50% is held by (i) Banco del Ahorro
Nacional y Servicios Financieros S.N.C. (“Bansefi”), acting as trustee under a trust agreement dated January 31, 2007
among Banco Interacciones, S.A., Institución de Banca Múltiple, Grupo Financiero Interacciones, as settlor, and
Bansefi as trustee, and (ii) Banco Interacciones, S.A., Institución de Banca Múltiple, Grupo Financiero Interacciones.
The collection rights derived from the Morelia-Aeropuerto Toll Road Concession were assigned to a trust
created under an irrevocable administration and source of payment trust agreement (Contrato de Fideicomiso
Irrevocable de Administración y Fuente de Pago), dated February 9, 2007, between Purépecha, as settlor and
beneficiary, and HSBC México, S.A. Institución de Banca Múltiple, Grupo Financiero HSBC, División Fiduciaria, as
trustee (as substituted by a substitution agreement dated September 30, 2009, between the parties to the irrevocable
administration and source of payment trust agreement and Banco Inbursa, S.A. Institución de Banca Múltiple, Grupo
Financiero Inbursa) (the “Morelia-Aeropuerto Trust”). The main purpose of the Morelia-Aeropuerto Trust is to
administer (i) all payments in connection with the Morelia-Aeropuerto Toll Road Concession, and (ii) any financings
entered into in connection with such toll road, including, without limitation, the securitization of its collection rights.
The 22.6 km of the Morelia-Aeropuerto toll road were in operation through which approximately 2,282
vehicles traveled per day in 2013 and 2,331 vehicles traveled per day in 2014. According to the records of Opervite,
traffic on the Morelia-Aeropuerto toll road has historically consisted principally of private cars.
The following table sets forth traffic volume and other operating data in respect of the Morelia-Aeropuerto
toll road for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Daily Traffic by Vehicle Equivalents:
Morelia-Aeropuerto Toll Road .....................
2,331
2,282
2,422
The following table sets forth average toll fees charged for vehicle equivalents in respect of to the MoreliaAeropuerto toll road for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Toll Fee Charged for Vehicle Equivalents (in Ps.):
Morelia-Aeropuerto Toll Road ....................
GA #100224v5
56.85
55.75
53.72
Principal construction under the Morelia-Aeropuerto Toll Road Concession was completed in 2008.
Currently, there are no construction works in progress in connection with this concession, aside from the routine
major and minor maintenance services.
Set forth below is a description of the main terms and conditions of the Morelia-Aeropuerto Toll Road
Concession:

Consideration. Purépecha is obligated to pay the State of Michoacán 0.5% of the monthly gross toll
income (excluding VAT) of the Morelia-Aeropuerto toll road as consideration for operating the
Morelia-Aeropuerto toll road. This percentage will increase to 1.0% if the project’s Real Annual Rate
of Return reaches or surpasses 12.5%. Furthermore, it will increase to 1.5% if the project’s Real
Annual Rate of Return reaches or surpasses 17.5%. In 2007, an investment of Ps.55.0 million was
contributed as initial consideration.

Toll Rates. Purépecha is entitled to collect the authorized toll rates established in the MoreliaAeropuerto Toll Road Concession. These rates are adjusted annually in January in accordance with the
INPC in effect at such time. In the event that the INPC increases by 6% or more from the last
adjustment, Purépecha has the right to correspondingly adjust the toll rate to compensate for inflation.
In addition, every four months Purépecha is entitled to apply different discounts on the authorized toll
rates and to establish different toll rates depending on the time of day, time of year and type of vehicle,
to maximize the Morelia-Aeropuerto Toll Road Concession revenues, as long as such toll rates do not
exceed the authorized toll rates. In the event that the total equity invested and the projected Real
Annual Rate of Return is paid to Purépecha before the expiration of the concession’s term, the toll
rates will be adjusted pursuant to the methodology established in the Morelia-Aeropuerto Toll Road
Concession.

Minimum Capital Stock Requirements. The Morelia-Aeropuerto Toll Road Concession provides that
Purépecha is required to maintain a minimum capital stock equal to 10% of the total investment
required to construct, operate and maintain the Morelia-Aeropuerto Toll Road Concession. The
outstanding capital of Purépecha as of December 31, 2014 was Ps.216 million.

Release of Rights of Way. The Morelia-Aeropuerto Toll Road Concession required Purépecha to obtain
the Release of the Rights of Way for the project, which Purépecha obtained in February 2007.

Operation and Maintenance Requirements. Purépecha is entitled to operate the Morelia-Aeropuerto
toll road according to the terms of the Morelia-Aeropuerto Toll Road Concession and relevant law.
Purépecha is required to maintain a performance bond to guarantee the compliance of our obligations
under the concession. As of December 31, 2014, such performance bond amounted to Ps.23.5 million.

Concession Revenues and Investment Return. Purépecha is entitled to receive revenues from toll road
collections during the term of this concession in an amount equal to the total equity invested. In the
event that the total equity invested is paid to Purépecha before the expiration of the concession’s term,
the toll rates will be adjusted pursuant to the methodology established in the Morelia-Aeropuerto Toll
Road Concession. All toll road collections under the Morelia-Aeropuerto Toll Road Concession are
managed through the Morelia-Aeropuerto Trust.

Recall (rescate). Purépecha will be entitled to receive compensation if the Government of the State of
Michoacán recalls Morelia-Aeropuerto Toll Road Concession. This compensation from the
Government of the State of Michoacán will be equal to the unrecovered total equity invested.

Revocation. The Morelia-Aeropuerto Toll Road Concession may be revoked in favor of the
Government of the State of Michoacán in the event that Purépecha breaches the terms of the
concession, including, for example, if Purépecha does not timely pay in full the total amount of the
monthly consideration to the Government of the State of Michoacán, or does not adequately operate
GA #100224v5
and preserve the toll road pursuant to the terms of the concession. Purépecha is entitled to receive
compensation as a result of the revocation of the concession in an amount equal to the unrecovered
total equity invested.

Termination. The Morelia-Aeropuerto Toll Road Concession will terminate automatically upon,
among other events, the expiration of its term or the mutual agreement of Purépecha and the
Government of the State of Michoacán. In the event of early termination, Purépecha is entitled to
receive compensation equal to the unrecovered total equity invested.

Competing Projects. The Morelia-Aeropuerto Toll Road Concession establishes that the Government
of the State of Michoacán may grant similar concessions, even if it affects the economic performance
of Purépecha, in which case Purépecha will be entitled to compensation by submitting documentation
evidencing (i) the decrease in the traffic volume, (ii) that such decrease has existed for a term of 6
months prior to the date in which the compensation is requested, and (iii) that such decrease has
affected the concession revenues pursuant to the audited financial statements issued by an auditor
appointed by the Government of the State of Michoacán and Purépecha.
San Luis Río Colorado-Estación Doctor Toll Road Concession
On September 2, 2008, the Government of the State of Sonora, through its Assets and Concessions State
Commission (Comisión Estatal de Bienes y Concesiones), granted our subsidiary CPAC, a concession to construct,
operate and maintain approximately 48 km of a two lane asphalt toll road that runs through San Luis Río Colorado,
Sonora (the “San Luis Río Colorado-Estación Doctor Toll Road Concession”). The San Luis Río Colorado-Estación
Doctor Toll Road Concession expires on September 1, 2038.
The following map shows the location of the San Luis Río Colorado-Estación Doctor toll road:
Source: Bidding documents.
The collection rights and indemnities collected from insurances or bonds from the San Luis Río Colorado–
Estación Doctor Toll Road Concession were assigned to a trust created under an investment, administration and
source of payment trust agreement (Contrato de Fideicomiso de Inversión, Administración y Fuente de Pago), dated
September 8, 2008, between CPAC, as settlor and beneficiary, and Banco Invex, S.A., Institución de Banca Múltiple,
Invex Grupo Financiero, Fiduciario, as trustee (the “San Luis Río Colorado–Estación Doctor Trust”). The San Luis
Río Colorado–Estación Doctor Trust main purpose is to administer (i) all payments in connection with the San Luis
Río Colorado–Estación Doctor Toll Road Concession and (ii) any financings entered into in connection with such toll
road, including, without limitation, a securitization of its collection rights.
As of December 31, 2014, the 48.2 km of the San Luis Río Colorado-Estación Doctor toll road were in
operation, through which approximately 573 vehicles traveled per day in 2013 and 435 vehicles traveled per day
during 2014, this decreasewas due to the completion of major roadwork in the free adjacent road. According to the
GA #100224v5
records of Opervite, traffic on the San Luis Río Colorado-Estación Doctor toll road has historically consisted
principally of private cars.
The following table sets forth traffic volume and other operating data with respect to the San Luis Río
Colorado-Estación Doctor toll road for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Daily Traffic by Vehicle Equivalents:
435
San Luis Río Colorado-Estación Doctor Toll Road
573
714
The following table sets forth average toll fees charged for vehicle equivalents with respect to the San Luis
Río Colorado-Estación Doctor toll road for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Toll Fee Charged for Vehicle Equivalents (in Ps.):
San Luis Río Colorado-Estación Doctor Toll Road
104.83
113.06
115.77
Principal construction under the San Luis Río Colorado-Estación Doctor Toll Road Concession was
completed in September 2009. Currently, there are no construction works in progress in connection with this
concession, aside from routine major and minor maintenance services.
Set forth below is a description of the main terms and conditions of the San Luis Río Colorado-Estación
Doctor Toll Road Concession:

Consideration. We are required to pay the Government of the State of Sonora 1.0% of the annual gross
toll income (excluding VAT) of the San Luis Río Colorado-Estación Doctor toll road as consideration
for operating the San Luis Río Colorado-Estación Doctor toll road. An initial payment of Ps.312.0
million was contributed to the Government of the State of Sonora upon the grant of this concession.

Toll Rates. We are entitled to collect the authorized toll rates established in the San Luis Río ColoradoEstación Doctor Toll Road Concession. These rates may be adjusted annually in January in accordance
with the INPC in effect at such time. In the event that the INPC increases by 5% to 8% from the last
adjustment, CPAC may request the Government of the State of Sonora to apply a new adjustment by
submitting documentation justifying such adjustment, and whenever the INPC increases by more than
8%, CPAC will be entitled to an adjustment without need to submit supporting documentation.

Minimum Capital Stock Requirements. CPAC is required to maintain a minimum capital stock of
Ps.20.0 million. The outstanding capital stock of CPAC as of December 31, 2014 was Ps.367.1
million.

Release of Rights of Way. The San Luis Río Colorado-Estación Doctor required us to obtain the
Release of the Rights of Way for the project from the SCT, which we obtained in September 2008.

Operation and Maintenance Requirements. We are entitled to operate the San Luis Río ColoradoEstación Doctor toll road under the terms of the San Luis Río Colorado-Estación Doctor Toll Road
Concession and according to relevant law. We are required to maintain an operation reserve fund in an
amount of Ps.3 million, which is adjusted on an annual basis in accordance with fluctuations in the
INPC. As of December 31, 2014, it amounted to Ps.3.7 million. The Company was obliged to maintain
GA #100224v5
a bond to guarantee the compliance of the obligations of the Concession; as of December 31, 2014 the
amount arised to Ps.$7.8 million

Concession Revenues and Investment Return. We are entitled to receive revenues from toll road
collections during the remaining term of this concession in an amount equal to the total equity
invested. All toll road collections under the San Luis Río Colorado-Estación Doctor Toll Road
Concession are managed through the San Luis Río Colorado-Estación Doctor Trust.

Recall (rescate). We will be entitled to receive compensation if the Government of the State of Sonora
recalls San Luis Río Colorado-Estación Doctor Toll Road Concession. This compensation from the
Government of the State of Sonora will be equal to the unrecovered total equity invested plus the Real
Annual Rate of Return, calculated pursuant to the general guidelines established in the recall order
issued by the Government of the State of Sonora, taking into account the total equity invested and the
value of the assets of the San Luis Río Colorado–Estación Doctor Toll Road Concession.

Revocation. The San Luis Río Colorado-Estación Doctor Toll Road Concession may be revoked in
favor of the Government of the State of Sonora in the event that CPAC breaches the terms of the
concession, including for example, if CPAC does not timely pay in full the total amount of the annual
consideration to the Government of the State of Sonora, or does not adequately operate and preserve
the toll road pursuant to the terms of the concession. CPAC is entitled to receive compensation equal to
the equity capital invested in the construction of the San Luis Río Colorado-Estación Doctor toll road
as a result of the revocation of the concession, calculated pursuant to the terms established in the San
Luis Río Colorado – Estación Doctor Toll Road Concession.

Termination. The San Luis Río Colorado-Estación Doctor Toll Road Concession will terminate
automatically upon, among other events, the expiration of its term or the mutual agreement of CPAC
and the Government of the State of Sonora. In the event of early termination, CPAC is entitled to
receive compensation equal to the unrecovered total equity invested.
Tlaxcala-Puebla Toll Road Concession
On July 23, 2008, the Government of the State of Tlaxcala, granted us through our subsidiary, CONCEMEX
(which is currently in a merger process with CPAC), a concession to construct, operate and maintain approximately
16 km of a two lane asphalt toll road connecting Puebla with Tlaxcala (the “Tlaxcala-Puebla Toll Road Concession”).
The Tlaxcala-Puebla Toll Road Concession expires 30 years from the date the Tlaxcala-Puebla toll road initiates
operations. The following map shows the location of the Tlaxcala-Puebla toll road:
Source: Pinfra.
GA #100224v5
The construction works provided in the Tlaxcala-Puebla Toll Road Concession will be concluded on January
of 2015.
Set forth below is a description of the main terms and conditions of the Tlaxcala-Puebla Toll Road
Concession:

Consideration. We are required to pay the Government of the State of Tlaxcala 0.5% of the biannual
gross toll income (excluding VAT) of the Tlaxcala-Puebla toll road as consideration for operating the
Tlaxcala-Puebla toll road.

Toll Rates. We are entitled to collect the authorized toll rates established in the Tlaxcala-Puebla Toll
Road Concession. These rates may be adjusted annually in January in accordance with the INPC in
effect at such time. In the event that the INPC increases by 5% or more from the last adjustment, we
have the right to correspondingly adjust the toll rate to compensate for inflation. In addition, we are
entitled to request the Government of the State of Tlaxcala adjustments to the authorized toll rates
upon the occurrence of certain extraordinary events. We are entitled to apply discounts on the
authorized toll rates and to establish different toll rates depending on the type of vehicle, as long as
such toll rates do not exceed the authorized toll rates.

Minimum Capital Stock Requirements. The Concessionaire is required to maintain a minimum capital
stock of Ps.20 million. CONCEMEX is on a merging process with CPAC for which the latter will be
the holder of this concession. The outstanding capital of CPAC as of December 31, 2014 was Ps.367.1
million.

Release of Rights of Way. The Tlaxcala-Puebla Toll Road Concession required us to obtain the Release
of the Rights of Way for the project, which could be considered as invested equity. We obtained the
Release of the Rights of Way in its whole.

Construction Requirements. As part of the initial works required under the concession, we are required
to construct the Tlaxcala-Puebla toll road. The plans, projects and any transactions relating to the
construction of the Tlaxcala-Puebla toll road are subject to the supervision of the Government of the
State of Tlaxcala. The cost of such supervision shall be borne by us. We are permitted to engage third
parties for the construction works.

Operation and Maintenance Requirements. We are entitled to operate the Tlaxcala-Puebla toll road
pursuant to the terms of the Tlaxcala-Puebla Toll Road Concession and applicable laws.

Concession Revenues and Investment Return. We are entitled to receive revenues from toll road
collection during the term of this concession in an amount equal to the total equity invested.

Recall (rescate). We will be entitled to receive compensation if the Government of the State of
Tlaxcala recalls the Tlaxcala-Puebla Toll Road Concession. This compensation from the Government
of the State of Tlaxcala will be equal to the unrecovered total equity invested.

Revocation. The Tlaxcala-Puebla Toll Road Concession may be revoked in favor of the Government of
the State of Tlaxcala in the event that CONCEMEX breaches the terms of the concession, including,
for example, if CONCEMEX does not timely pay in full the total amount of the biannual consideration
to the Government of the State of Tlaxcala, or does not adequately operate and preserve the toll road
pursuant to the terms of the concession. CONCEMEX is entitled to receive compensation equal to the
unrecovered equity invested as a result of the revocation of the concession.

Termination. The Tlaxcala-Puebla Toll Road Concession will terminate automatically upon, among
other events, the expiration of its term or the mutual agreement of CONCEMEX and the Government
of the State of Tlaxcala. In the event of early termination, CONCEMEX is entitled to receive
compensation equal to the unrecovered total equity invested.
GA #100224v5

Competing Projects. The Tlaxcala-Puebla Toll Road Concession establishes that the Government of
the State of Tlaxcala may not grant similar concessions for toll roads that could compete with the
Tlaxcala-Puebla toll road. In the event that the Government of the State of Tlaxcala fails to comply
with such obligation, we are entitled to receive compensation pursuant to applicable law. In the event
that the Federal Government or the Government of the State of Puebla decide to construct any road or
modify any concession that cause such road to compete with the Tlaxcala – Puebla toll road, the
Government of the State of Tlaxcala will compensate Concemex through an extension in the term of
the concession or an adjustment of the toll rates.
Tlaxcala-San Martín Texmelucan Toll Road Concession
On March 15, 1990, the Mexican Federal Government, granted to Autopistas Concesionadas del Altiplano,
S.A. de C.V. (“AUCAL”) (currently VCCPacífico), a concession to construct, operate and maintain approximately
25.5 km of a four lane asphalt toll road that connects San Martín Texmelucan in Puebla with the City of Tlaxcala (the
“Tlaxcala-San Martín Texmelucan Toll Road Concession”). The Tlaxcala-San Martín Texmelucan Toll Road
Concession expires on March 14, 2041, due to several amendments negotiated with the Mexican Federal
Government. However, on November 19, 2010, AUCAL, with the prior authorization from the Mexican Federal
Government, assigned PAPSA its rights to this concession along with certain other rights derived from a lawsuit filed
by AUCAL against the Government of the State of Tlaxcala (the “Tlaxcala-San Martín Texmelucan Assignment
Agreement”). The claims in the suit arose from disputes concerning the exploitation of said concession. The issues in
dispute related to contested approaches to the appraisal percentage guarantees and the discovery of various
unauthorized access points and turnaround points within the road that led to toll evasion.
As a result of our acquisition of the Tlaxcala-San Martín Texmelucan Toll Road Concession and the
settlement reached with the Mexican Federal Government in connection with the abovementioned lawsuit, on
February 25, 2011, the Mexican Federal Government authorized a 30-year extension of the Pirámides-EcatepecPeñón Toll Road Concession and the Armería-Manzanillo Toll Road Concession (current terms are mentioned in the
description of the Pirámides-Ecatepec-Peñón Toll Road Concession and the Armería-Manzanillo Toll Road
Concession, respectively).
With respect to the foregoing, the SCT approved PAPSA’s spin-off for tax purposes effective January 1,
2014, in order to incorporate the VCCPAPSA and VCCPacífico companies. Concession rights and obligations for the
Pirámides-Ecatepec-Peñón Highway, the Armería-Manzanillo Highway and the Tlaxcala-San Martín Texmelucan
Highway were transferred to the VCCPacífico company.
The following map shows the location of the Tlaxcala-San Martín Texmelucan Toll Road Concession:
Source: Google Earth.
The collection rights and indemnities collected from insurances or bonds from the Tlaxcala–San Martín
Texmelucan Toll Road Concession were assigned to a trust created under an irrevocable trust agreement (Contrato de
Fideicomiso Irrevocable), dated November 19, 2010, between PAPSA as settlor and beneficiary, and Banco Monex,
S.A. Institución de Banca Múltiple, Grupo Financiero, División Fiduciaria, as trustee (the “Tlaxcala–San Martín
Texmelucan Trust”). The main purpose of the Tlaxcala–San Martín Texmelucan Trust is to administer (i) all
payments in connection with the Tlaxcala–San Martín Texmelucan Toll Road Concession and (ii) any financings
entered into in connection with such toll road, including, without limitation, a securitization of its collection rights.
GA #100224v5
As of March 31, 2014, the 25.5 km of the Tlaxcala-San Martín Texmelucan Toll Road Concession were in
operation, through which approximately 6,348 vehicles traveled per day in 2013 and 6,080 vehicles traveled per day
during 2014. According to the records of Opervite, traffic on the Tlaxcala-San Martín Texmelucan toll road has
historically consisted principally of private cars.
The following table sets forth traffic volume and other operating data in respect of to the Tlaxcala-San
Martín Texmelucan Toll Road Concession for the periods indicated:
For the year ended December 31,
2014
2013
2012
6,080
6,348
6,454
Average Daily Traffic by Vehicle Equivalents:
Tlaxcala-San Martín Texmelucan Toll Road
The following table sets forth average toll fees charged for vehicle equivalents in respect of the Tlaxcala-San
Martín Texmelucan Toll Road Concession for the periods indicated:
For the year ended December 31,
2014
2013
2012
Average Toll Fee Charged for Vehicle Equivalents (in Ps.):
Tlaxcala-San Martín Texmelucan Toll Road
64.05
61.62
58.43
Set forth below is a description of the main terms and conditions of the Tlaxcala-San Martín Texmelucan
Toll Road Concession:

Consideration. We are required to pay the Mexican Federal Government 0.5% of gross annual toll
income (exclusive of VAT) of the Tlaxcala-San Martín Texmelucan toll road as consideration for
operating the Tlaxcala-San Martín Texmelucan toll road. In addition, and as a result of the TlaxcalaSan Martín Texmelucan Assignment Agreement, PAPSA paid to AUCAL Ps.1.0 billion plus VAT.
The Mexican Federal Government has recognized (i) Ps.400.0 million as equity investment under the
Armería-Manzanillo Toll Road Concession; (ii) Ps.250.0 million as equity investment under the
Pirámides-Ecatepec-Peñón Toll Road Concession; and (iii) the remaining Ps.350.0 million as equity
investment under the Tlaxcala-San Martín Texmelucan Toll Road Concession.

Toll Rates. We are entitled to collect the authorized toll rates established in the Tlaxcala-San Martín
Texmelucan Toll Road Concession, which may be adjusted biannually in accordance with the INPC in
effect at such time. In the event that the INPC increases by 5% or more from the last adjustment, we
have the right to correspondingly adjust the toll rate to compensate for inflation. We may adjust the toll
rates in certain extraordinary events. In addition, we are entitled to apply discounts on the authorized
toll rates and to establish different toll rates depending on the time of day, time of year and type of
vehicle, as long as such toll rates do not exceed the authorized toll rates.

Minimum Capital Stock Requirements. VCCPacífico is required to maintain a fixed minimum capital
of Ps.20.0 million. The outstanding capital stock of VCCPacífico as of December 31, 2014 was
Ps.2,662.2 million.

Release of Rights of Way. The Release of the Rights of Way was already obtained when AUCAL
assigned to VCCPacífico the Tlaxcala-San Martín Texmelucan Toll Road Concession.

Operation and Maintenance Requirements. We are entitled to maintain and operate the Tlaxcala-San
Martín Texmelucan toll road in accordance with the Tlaxcala-San Martín Texmelucan Toll Road
Concession and applicable laws and we will provide open access along the road to permit free transit
GA #100224v5
for local residents. We are required to maintain a performance bond to guarantee the compliance of our
obligations under the concession. As of December 31, 2014, such performance bond amounted to
Ps.6.0 million.

Concession Revenues and Investment Return. We are entitled to receive revenues from toll road
collections during the remaining term of this concession in an amount equal to the total equity invested
plus a Real Annual Rate of Return of 10.5%. As of September 30, 2010 the Mexican Federal
Government recognized an equity investment under this concession in an amount equal to Ps.856.0
million. The Mexican Federal Government has recognized that in order to recover the total equity
invested we are entitled to request an extension for up to an additional 30 years. All toll road
collections under the Tlaxcala-San Martín Texmelucan Toll Road Concession are managed through the
Tlaxcala-San Martín Texmelucan Trust.

Recall (rescate). In the event that the Mexican Federal Government recalls the Tlaxcala-San Martín
Texmelucan Toll Road Concession, we will be entitled to receive compensation from the Mexican
Federal Government pursuant to applicable law.

Revocation. The Tlaxcala-San Martín Texmelucan Toll Road Concession may be revoked in favor of
the Mexican Federal Government in the event that VCCPacífico breaches the terms of the concession,
including, for example, if VCCPacífico does not timely pay in full the total amount of the annual
consideration to the Mexican Federal Government, or does not adequately operate and preserve the toll
road pursuant to the terms of the concession. VCCPacífico is not entitled to receive any compensation
as a result of the revocation of the concession.

Termination. The Tlaxcala-San Martín Texmelucan Toll Road Concession will terminate automatically
upon, among other events, the expiration of its term or the mutual agreement of VCCPacífico and the
Mexican Federal Government. VCCPacífico is not entitled to receive any compensation as a result of
the early termination of the concession.

Competing Projects. The Tlaxcala-San Martín Texmelucan Toll Road Concession establishes that the
Mexican Federal Government may not grant similar concessions that could compete with the TlaxcalaSan Martín Texmelucan Toll Road Concession. If the Mexican Federal Government fails to comply
with such obligation, we are entitled to receive compensation pursuant to applicable law.
Vía Atlixcáyotl, Virreyes-Teziutlán and Apizaco-Huauchinango Toll Road Concession.
On December 7, 2012, the Government of the State of Puebla granted PAPSA (currently VCCPAPSA) a
concession for the operation, development and maintenance of the Apizaco – Huauchinango, Virreyes – Teziutlán
toll roads and the Atlixcáyotl way, with a combined length of 142.5 km, in the State of Puebla. The concession for
the Apizaco – Huauchinango, Virreyes – Teziutlán toll roads and the Atlixcáyotl way was granted as part of the
2011-2017 State Development Plan, for the purposes of improving and modernizing the interstate transportation
system. The concession for the Apizaco – Huauchinango, Virreyes – Teziutlán and the Atlixcáyotl Toll Road
Concession expires on December 6, 2042.
The SCT also approved PAPSA’s spin-off for tax purposes effective January 1, 2014, in order to
incorporate the VCCPAPSA and VCCPacífico companies. The concession rights and obligations for the Apizaco –
Huauchinango, Virreyes – Teziutlán toll roads and the Via Atlixcáyotl were transferred to VCCPAPSA.
The map below shows the location of the Apizaco – Huauchinango, Virreyes – Teziutlán and the Via
Atlixcáyotl toll roads:
GA #100224v5
Source:Pinfra
The 142.5 km comprising the Apizaco – Huauchinango, Virreyes – Teziutlán and the Via Atlixcáyotl
toll roads were in operation. In 2013 and 2014, the volume of traffic on these toll roads increased from
approximately 2,659, 3,478 and 17,931 vehicles per day, respectively, to 2,761, 3,663 and 17,924, respectively.
The following table shows the ADTV of the Apizaco – Huauchinango, Virreyes – Teziutlán and the Via
Atlixcáyotl Highways during the periods indicated:
2014
Years ended December 31
2013
2012
ADTV:
2,761
Carretera Apizaco-Huauchinango .................................
2,659
3,019
17,924
3,663
17,931
20,896
3,478
3,952
Carretera Vía Atlixcáyotl
Carretera Virreyes-Teziutlán
GA #100224v5
The following table shows the Average Toll Fee Charged for Vehicle Equivalents of the Apizaco –
Huauchinango, Virreyes – Teziutlán and the Via Atlixcáyotl toll roads during the periods indicated:
2013
Years ended December 31
2012
2011
Average Toll Fee Charged for Vehicle Equivalents:
Carretera Apizaco-Huauchinango .................................
Carretera Vía Atlixcáyotl
Carretera Virreyes-Teziutlán
94.83
31.33
90.24
91.38
85.82
29.44
27.55
85.38
81.39
Construction works provided in the Concession for the Apizaco – Huauchinango, Virreyes – Teziutlán and
the Via Atlixcáyotl toll roads are completed. Except for major and minor routine maintenance projects, currently no
construction work is being carried out on these highways.
A summary of the principal terms and conditions of the concession for the Apizaco – Huauchinango,
Virreyes – Teziutlán and the Via Atlixcáyotl toll roads is included below:
 Consideration. As initial consideration, the Company paid the amount of Ps.2,494’009,324.08. With
respect to the use of the concession, the Company is also required to pay the Government of the State of
Puebla an amount equivalent to 1.0% of the annual gross toll income (excluding VAT) collected on the
Apizaco – Huauchinango, Virreyes – Teziutlán and the Via Atlixcáyotl toll roads.
 Toll Rates. We are entitled to collect the authorized toll rates established in the Vía Atlixcáyotl, VirreyesTeziutlán and Apizaco-Huauchinango Toll Road Concession. These rates are adjusted annually in January
in accordance with the INPC in effect at such time. In the event that the INPC increases by 5% or more
within 6 months from the last adjustment, we have the right to adjust the toll rate to compensate for
inflation.
 Release of Rights of Way. We have currently completed the Release of Rights of Way for the Vía
Atlixcáyotl, Virreyes-Teziutlán and Apizaco-Huauchinango Toll Road Concession.
 Minimum Capital Stock Requirements. VCCPAPSA is required to maintain a minimum fixed capital of at
least Ps.20 million. As of December 31, 2014, VCCPAPSA capital amounted to Ps.1,196.0 million.
 Operations and Maintenance Requirements. We are required to operate the project in accordance with the
terms of the Vía Atlixcáyotl, Virreyes-Teziutlán and Apizaco-Huauchinango Toll Road Concession. We are
required to maintain a performance bond equivalent to 3% of the initial consideration. As of December 31,
2014, the amount of said bond was Ps.66.8 million. Likewise, the Concessionaire is obliged to keep bonds
that guarantee compliance of the operation and maintenance. As of December 31, 2014 the bonds arised to
(i) Ps.45.5 million in Apizaco-Huachinango; (ii) Ps.60.7 million in Virreyes-Teziutlán; and (iii) Ps.48.5
million in Via Atlixcáyotl.
 Recall (rescate). We will be entitled to receive compensation if the Government of the State of Puebla recalls
the Vía Atlixcáyotl, Virreyes-Teziutlán and Apizaco-Huauchinango Toll Road Concession pursuant to
applicable law.
 Revocation. The Government of the State of Puebla has the right to revoke the Vía Atlixcáyotl, VirreyesTeziutlán and Apizaco-Huauchinango Toll Road Concession, in the event that VCCPAPSA defaults on the
concession terms, including, for example, that VCCPAPSA does not pay the Government of the State of
GA #100224v5
Puebla the annual consideration or does not operate or maintain the highway in accordance with the
provisions of the concession. In the event of concession revocation, VCCPAPSA is not entitled to receive
any compensation.
 Termination. The Vía Atlixcáyotl, Virreyes-Teziutlán and Apizaco-Huauchinango Toll Road Concession
shall automatically terminate upon any of the following events, among others: (i) expiration of its term; (ii)
by mutual agreement between the Federal Government and VCCPAPSA; (iii) in the event of its revocation;
and (iv) once the total amount of payable toll fees are paid in accordance with the concession. In the event of
early termination, the Government of the State of Puebla shall have the right to collect toll fees on the
Apizaco – Huauchinango, Virreyes – Teziutlán and the Via Atlixcáyotl Toll Roads.
Pátzcuaro-Uruapan-Lázaro Cárdenas Toll Road Concession
On March 30, 2012, the Mexican Federal Government, through the SCT, granted to Concesionaria de
Autopistas de Michoacán (a joint venture among Pinfra (holding a 25.02% interest), Azvi-Cointer de México, S.A. de
C.V., Infraestructura Institucional FI, S.A.P.I. de C.V. and Sociedad Michoacana de Constructores, S.A.P.I. de C.V.)
a concession to construct, operate and maintain (i) the Morelia and Uruapan beltways (89 km) and (ii) the PátzcuaroUruapan (47 km) and Lázaro Cárdenas (216 km) toll roads and modernization work associated therewith for a term of
30 years. The Pátzcuaro-Uruapan-Lázaro Cárdenas Toll Road Concession was granted pursuant to the second stage
of the Mexican National Infrastructure Plan for 2007-2012. The concession’s terms were renegotiated with the SCT,
and it expires on March 30, 2042.
The rights and obligations of Concesionaria de Autopistas de Michoacán are set forth in the Shareholders
Agreement, dated January 31, 2012. Such agreement provides, among other things, the guidelines for the governance
of Concesionaria de Autopistas de Michoacán. On March 31, 2012, Concesionaria de Autopistas de Michoacán
executed a service contract for the operation and maintenance of the Pátzcuaro-Uruapan-Lázaro Cárdenas toll road
with Operadora de Autopistas de Michoacán, S.A.P.I. de C.V., another joint venture in which we hold a 25.2%
equity stake. This service contract provides the guidelines for the operation of the Pátzcuaro-Uruapan-Lázaro
Cárdenas toll road. The operations of Operadora de Autopistas de Michoacán, S.A.P.I. de C.V., in turn, are subject to
a Shareholders Agreement dated February 23, 2012.
The following table sets forth certain data relating to the Pátzcuaro-Uruapan-Lázaro Cárdenas Toll Road
Concession:
Remaining Term
(years)
Morelia Beltway.....................
29
Uruapan Beltway ...................
29
Pátzcuaro-UruapanLázaro Cárdenas
29
stretch .........................................
Total ...........................................
29
Location
Michoacán
Michoacán
64
25
Average Daily
Traffic by
Vehicle
Equivalents
—
—
263
352
16,275
16,275
Length (km)
Michoacán
—
The following table shows the ADTV of the Pátzcuaro-Uruapan-Lázaro Cárdenas Toll Road
Concession during the periods indicated:
Year ended December 31,
2014
2013
2012
ADTV:
Patzcuaro-Uruapan
Uruapan-Nueva Italia
GA #100224v5
7,821
8,203
5,258
6,087
-
Nueva Italia – Lazaro Cardenas
Total
3,196
3,531
16,275
17,821
-
The following table sets forth our revenues from the Pátzcuaro-Uruapan-Lázaro Cárdenas Toll Road
Concession for the periods indicated.
2014
Year ended December 31,
2013
2012
Average Toll Fee Charged for
Vehicle Equivalents
Patzcuaro-Uruapan
Uruapan-Nueva Italia
Nueva Italia – Lazaro Cardenas
Total
69.65
66.76
86.75
80.85
231.33
224.93
102.91
106.93
-
The following map shows the location of the Pátzcuaro-Uruapan-Lázaro Cárdenas Toll Road Concession:
Principal construction of the Pátzcuaro-Uruapan-Lázaro Cárdenas Toll Road Concession are currently in
construction of the Morelia Beltway, the extension to 4 lanes of the Pátzcuaro-Uruapan stretch and the modernization
of the Pátzcuaro-Lázaro Cárdenas stretch. The release of the rights of way of the Uruapan beltway is still in process.
Set forth below is a description of the main terms and conditions of the Pátzcuaro-Uruapan-Lázaro Cárdenas
Toll Road Concession:

Consideration. We are required to pay the Mexican Federal Government for operating the PátzcuaroUruapan-Lázaro Cárdenas Toll Road Concession (i) an initial payment equal to 25.02%
(corresponding to our equity stake in Concesionaria de Autopistas de Michoacán) of
Ps.752’100,000.00 and (ii) an annual payment equal to 25.02% (corresponding to our equity stake in
Concesionaria de Autopistas de Michoacán) of 0.5% of the annual revenues of the Pátzcuaro-UruapanLázaro Cárdenas Toll Road Concession.

Toll Rates. Concesionaria de Autopistas de Michoacán is entitled to collect the authorized toll rates
established in the Pátzcuaro-Uruapán-Lázaro Cárdenas Toll Road Concession. These rates are adjusted
annually, starting January 2013, in accordance with the INPC in effect at such time. In addition, at any
time when the INPC increases by 5% or more, Concesionaria de Autopistas de Michoacán has the right
to correspondingly adjust the toll rate to compensate for inflation.
GA #100224v5

Minimum Capital Stock Requirements. Concesionaria de Autopistas de Michoacán is required to
maintain a minimum capital stock of Ps.50,000 million. As of December 31, 2014, Concesionaria de
Autopistas de Michoacán capital amounted to Ps.986 million.

Release of Rights of Way. The Pátzcuaro-Uruapán-Lázaro Cárdenas Toll Road Concession required
Concesionaria de Autopistas de Michoacán to obtain the Release of the Rights of Way for the projects
jointly with the Mexican Federal Government.

Operation and Maintenance Requirements. Concesionaria de Autopistas de Michoacán is entitled to
operate the road according to the terms established in the Pátzcuaro-Uruapan-Lázaro Cárdenas Toll
Road Concession and according to relevant laws. Concesionaria de Autopistas de Michoacán is
required to maintain an operation and maintenance reserve. In addition, Concesionaria de Autopistas
de Michoacán, S.A. de C.V. is required to maintain a 30% performance bond equivalent to guarantee
the compliance of our obligations under the concession.

Concession Revenues and Investment Return. All toll road collections under the Pátzcuaro-UruapanLázaro Cárdenas Toll Road Concession are managed through the trust for the operation of such
concession. Concesionaria de Autopistas de Michoacán must form a fund of at least Ps.200 million to
guarantee the right of way.

Recall (rescate). In the event that the Mexican Federal Government recalls the Pátzcuaro-UruapanLázaro Cárdenas Toll Road Concession, Concesionaria de Autopistas de Michoacán will be entitled to
receive compensation from the Mexican Federal Government pursuant to applicable law.

Revocation. The Pátzcuaro-Uruapan-Lázaro Cárdenas Toll Road Concession may be revoked in favor
of the Mexican Federal Government in the event that Concesionaria de Autopistas de Michoacán
breaches the terms of the concession, including, for example, if does not timely pay in full the total
amount of the annual consideration to the Mexican Federal Government, or does not adequately
operate and preserve the toll road pursuant to the terms of the concession. Concesionaria de Autopistas
de Michoacán is not entitled to receive any compensation as a result of the revocation of the
concession.

Termination. The Pátzcuaro-Uruapan-Lázaro Cárdenas Toll Road Concession will terminate
automatically upon, among other events, the expiration of its term or the mutual agreement of
Concesionaria de Autopistas de Michoacán and the Mexican Federal Government. In the event of early
termination, the Mexican Federal Government is entitled to receive the collection rights from the
Pátzcuaro-Uruapan-Lázaro Cárdenas Toll Road Concession, which shall be applied to the repayment
of any outstanding amounts owed under a securitization transaction.
Siglo XXI Toll Road Concession
On November 28, 2013, the Federal Government through the SCT granted Concesionaria de Autopista de
Morelos, S.A. de C.V. ( “Concesionaria de Autopista de Morelos”) a concession for the construction of the
“Jantetelco-El Higuerón (Xicatlacotal)” section, which has a length of approximately 61.8 km (the “Siglo XXI Toll
Road Concession”). The Siglo XXI Toll Road Concession expires in 2042, and carries an approximate investment
of Ps.2.885 million and a grant from FONADIN for Ps.723 million. The Company has 51% stake in the
Concesionaria de Autopista de Morelos in conjunction with GBM and Aldesa. The Company contributed Ps.149
million to Concesionaria de Autopista de Morelos.
The map below shows the location of the Siglo XXI Toll Road:
GA #100224v5
Source: Diario de Morelos
The works commencement notice for the Siglo XXI Toll Road was given on September 25, 2014 so it is
already under construction.
A summary of the main terms and conditions of the Siglo XXI Toll Road Concession is included below:

Consideration. Concesionaria de Autopista de Morelos shall pay as consideration, no later than the last
business day of the first month of each year, the equivalent of 0.5% of the annual gross toll income
(excluding VAT) generated by the operation of the Siglo XXI Toll Road Concession during the term of the
concession.

Toll rates. Concesionaria de Autopista de Morelos is entitled to receive all the toll rates from the Siglo XXI
Highway.

Release of Rights of Way. Under the terms of the Siglo XXI Toll Road Concession, we must obtain the
Release of the Right of Way for the project. To create the contingency fund of the Right of Way, the sum
of Ps.120 million was contributed to an administration trust.

Operation and maintenance requirements. We are required to operate the project in accordance with the
terms of the Siglo XXI Toll Road Concession and applicable laws. As of the start of operations of the Siglo
XXI Highway, we are required to maintain an operation and maintenance reserve, which must be
equivalent to the greater of (i) Ps.10 million, updated annually according to the INPC; or (ii) the amount
necessary to cover 6 months of maintenance and conservation costs as per the program of periodic routine
conservation, of reconstruction and of maintenance of the toll road.

Recall (rescate) In the event that the Mexican Federal Government recalls the Siglo XXI Toll Road
Concession, Concesionaria de Autopista de Morelos will be entitled to receive compensation which will be
calculated by considering the investment made as well as the depreciation of assets, but in no event the
price of the assets awarded on concession will be taken into account.

Revocation. The Siglo XXI Toll Road Concession may be revoked in the event that Concesionaria de
Autopista de Morelos fails to comply with its terms, including, if Concesionaria de Autopista de Morelos
does not establish the required guarantees, makes changes to the project without the prior approval from
SCT, or fails to pay the annual consideration.

Termination. The Siglo XXI Toll Road Concession may be terminated by any of the situations provided for
in Article 16 of the Highways Law or by mutual agreement between the SCT and Concesionaria de
Autopista de Morelos.
GA #100224v5
Concession for the Elevated Viaduct of the Mexico-Puebla Toll Road
On March 7, 2008, the government of the State of Puebla granted Autovías Concesionadas OHL, S.A. de
C.V. (“OHL”) a concession for the construction, operation, conservation and maintenance of the Northern Bypass of
the City of Puebla (the “Concession for the Elevated Viaduct of the Mexico-Puebla Toll Road”). The Concession
title was modified twice: first on June 18, 2009, and then on December 8, 2010.
Subsequently, on May 9, 2012, a Resolution by means of which the rescue of the concession was declared,
for public purposes, was published in the Official Gazette of the State of Puebla. Consequently, on May 25, 2012
OHL filed an Amparo trial against the responsible authorities under the issuance of such Resolution. On November
7, 2013 such procedure concluded with a legal resolution that granted the defense and protection of the federal
courts to OHL and required the State to issue another resolution reiterating the rescue declaration, in the same terms,
that it included payment of the compensation corresponding to OHL. On November 21, 2013, such resolution was
issued, by virtue of which the aforementioned first resolution was declared void. On July 4, 2014, pursuant to the
resolution granted under the Amparo trial, the new rescue resolution with the settlement of the compensation
corresponding to OHL was issued. Finally, in order to give full effect to the aforementioned resolution, the
government of the State of Puebla and OHL agreed to grant a new Concession Title, which was awarded on August
18, 2014 and under which OHL was empowered to build, operate, keep and maintain an Elevated Viaduct of state
jurisdiction, with a toll and with four lanes with an 18 meter crown, with a length of 13.3 km, with a solution drawn
on the Mexico-Puebla federal toll road; from km 115 + 000 to km 128 + 8000 in the metropolitan area of Puebla.
Prior authorization from the Federal Government, on August 20, 2014 OHL and LEP entered into an
assignment agreement (the “Assignment Agreement of the Concession for the Elevated Viaduct of the MexicoPuebla Toll Road”) by means of which OHL assigned LEP the rights under the Concession for the Elevated Viaduct
of the Mexico-Puebla Toll Road.
The Company owns 49% of the outstanding shares of LEP. The remaining 51% is owned by OHL México,
S.A.B. de C.V.
Under the Concession Title, its duration will be for a period of 30 years from the commencement of
operation of the Elevated Viaduct. The extension of such term is possible if, among others, it has not recovered the
total investment amount the Concessionaire is entitled to (plus the Guaranteed Return Rate), whether it derives from
causes not attributable to the concessionaire, a situation that temporarily prevented it from continuing with the
project existed, it were unable to operate the project, or project modifications were made that could cause an
overinvestment over what was originally planned.
The map below shows the location of the Elevated Viaduct:
GA #100224v5
A summary of the main terms and conditions of the Concession for the Elevated Viaduct of the MexicoPuebla Toll Road is included below:

Consideration. The Concessionaire shall pay the State as consideration, the equivalent of 0.5% of the
annual gross toll income (excluding VAT) generated by the Bypass. Such consideration is the second
concept to be paid by the Concessionaire with the revenues of the tolls charged to users.

Toll rates. The Concessionaire may assign or assess the collection rights of the toll, in such given event, it
must notify such to the State. Such tolls may not exceed the maximum authorized rates. The maximum
authorized rate will be automatically increased annually based on the National Consumers’ Price Index .
The Concession Title provides certain events that modify such updating scheme, an example of it is to
authorize the Concessionaire to apply differential rates as for the day of the week or time frame for the
management optimization of the infrastructure in case of an increase in the average daily traffic.

Release of Rights of Way. Under the terms of the Concession for the Elevated Viaduct of the MexicoPuebla Toll Road, the government of the State of Puebla must obtain the Release of the Right of Way for
the project. To create the contingency fund of the Right of Way, the sum of Ps.120 million was contributed
to an administration trust.

Concessionaire’s Obligations. The obligations that the Concessionaire has under the Title highlight the
performance security that it had to constitute, the construction bond it had to hire, the insurance to cover
damages that may be caused by virtue of the performance of the project, among others. In turn, it has the
obligation to deliver to the State the financial statements on a monthly basis and audited financial
statements on a yearly basis. It should also refrain from unilaterally amend the Executive Project, transmit
to the State the assets that comprise the Bypass once the term of the Concession is complied with, among
others.

Organisational requirements. The Concessionaire agrees to maintain its regime of sociedad anónima de
capital variable for the term of the Concession. In turn, it is established that its Bylaws must provide
certain social purpose, stipulate that foreign persons participating in the Company must expressly accept to
be considered as nationals in regards to their participation, its lifespan must commensurate with the term of
the concession, it must require the State’s authorization to celebrate any legal act whereby its entire
participation in the capital stock is transferred to third parties and it must include the notification to the
State requirement in case of a partial transfer of shares.
GA #100224v5

Financing. The Concession Title authorizes the pledge the Concessionaire’s shares in favor of the trust or
trusts that may be constituted, as applicable. In turn, as part of the construction and operation of the Bypass,
it is an obligation of the Concessionaire to constitute a trust whose purpose is to receive the funds that are
contributed for the construction of the project.

Capitalization requirements. The Concessionaire is required to maintain at all times a minimum capital of
20% of the Total Investment. As of December 31, 2014, the outstanding capital of the concessionaire arised
up to Ps.1,249.4 million.

Operation requirements. The Concessionaire must operate and keep the Bypass in “good” conditions. It
may exploit the ancillary and related services.

Revocation. The Concession for the Elevated Viaduct of the Mexico-Puebla Toll Road may be revoked in
the event that the Concessionaire fails to comply with its terms, including, if the Concessionaire does not
maintain the Elevated Viaduct or fails to make six consecutive payments.

Termination. The Concession for the Elevated Viaduct of the Mexico-Puebla Toll Road may be terminated
for lack of the state contribution on behalf of the government of the State of Puebla to which it committed
to, the granting on behalf of the government of the State of Puebla of toll road concessions with similar
specifications, the term of the Title, the concessionaire’s resignation and mutual agreement between the
parties.
Our Port Terminal Concession
In addition to our Toll Road Concessions, we hold a concession for the construction, maintenance and
operation of a container port terminal located in Tamaulipas, Mexico. This concession is regulated by the Mexican
Federal Government and other entities such as API. Typically, port concessions are structured in such a way that the
concessionaire may recover its investment by retaining the right to charge quotas or fees for a period of time
established in the related concession agreements
Altamira Port Terminal
Source: Pinfra.
The Altamira Port Terminal of IPM has a surface area of approximately 269,470m2, including buildings and
facilities, and 600 meters of water front, with an option to extend for an additional 350 meters. The total terrestrial
area of the terminal is 248,470m2 from which we have:
GA #100224v5

An approximately 236,170m2 container storage yard and general loading zone for 144 refrigerated
containers and 5,344m2 for container freight stations (CFS) and 3200m2 as warehouse for general
loading and steel;

An approximately 600 meters long, 20.5 meters wide and 12.5 meters official deep public dock; and

An approximately 21,000m2 (600 meters long and 35 meters wide) front water zone.
MAJOR EQUIPMENT OF THE TERMINAL
Numero de Grúas
2
Tipo
Panamax
Marca
Ansaldo
Fuente de Energia
Altura de elevación por encima de
muelle
Altura de elevación por debajo de
muelle
Elevacion Total
Numero de Estibas
1
1
RTG
RTG
Marathon
Kalmar
Electricidad Electricidad
Electricidad
Diesel
Diesel
30.5 metros 37.8 metros
37.0 metros
40.6 ton.
40 ton.
6x3 + 1
6x5 + 1
Liebherr
15 metros
43.5 metros 52.8 metros
13 ancho
18 ancho
15 metros
50.0 metros
18 ancho
Alcance
38.1 metros
48.0 metros
Backreach
15.24 metros
19 metros
Ancho de Via
16 metros
16 metros
Altura Libre
14 metros
Altura Total
Distancia entre brazos
Ancho Total
Capaciddad bajo spreader
4
Kalmar
13 metros
Grua Movil Super Panamax
4
85 metros
19.2 metros
17.1 metros
28 metros
27 metros
40.6 ton.
40 ton.
Capacidad bajo el gancho
100 ton.
Capacidad bajo cuerdas
104 ton.
65 ton.
82 ton.
Capacidad Operacional
Velocidad de desplazamiento
47.7 m/min
Velocidad de la Grua
152.4 m/min
5.7 km/h
45 m/min
134 m/min 130 m/min
200 m/min
51.8 m/min 70 m/min
Velocidad de elevacion con SWL
52 m/min
28.5 m/min
60 m/min
22.9 m/min 26 m/min
Velocidad del spreader
122 m/min
90 m/min
120 m/min
52 m/min
MINOR EQUIPMENT OF THE TERMINAL
GA #100224v5
Numero de
Equipos
Tipo
Marca
Capacidad
4
Top Loader
Kalmar
45 Ton.
2
Reach Stacker
Kalmar
45 Ton.
24
Yard Trucks
Kalmar / Ottowa
25 Ton.
1
Movil Telescopic
Grove
60 Ton.
26
Hoist
Hyster
6000 a 88000 Lbs.
Set forth below is a description of the main terms and conditions of the Altamira Port Terminal Concession:

Consideration. IPM is required to pay API a variable fee based on the number of containers that enter
and exit our container port terminal, as a consideration for the assignment of the concession.
Additionally, IPM must transfer to API any dockage fees (muellaje) that IPM may charge. Such
transfer must occur on the business day following of the receipt of the related fees in order for IPM to
avoid incurring penalty interest. IPM must also transfer to SHCP the fees (aprovechamientos) derived
from the storage and custody of foreign trade merchandise.

Service Rates. We are entitled to establish the rates for the loading and unloading of shipments,
deposits and delivery of the cargo and containers IPM renders under the Altamira Port Terminal
Assignment Agreement. These rates must be registered with the SCT and API at least three business
days prior to the date on which such rates are to become effective.

Minimum Capital Stock Requirements. IPM is required to maintain a fixed minimum of Ps.30.0 million
in equity throughout the life of the project. The outstanding capital stock of IPM as of December 31,
2014 was Ps.385 million.

Operation and Maintenance Requirements. We are required to operate the container port terminal in
accordance with the Altamira Port Terminal Assignment Agreement and applicable laws.

Recall (rescate). In the event the Mexican Federal Government recalls the Altamira Port Terminal
Concession, we will not be entitled to receive compensation from API nor the Mexican Federal
Government.

Revocation. The Altamira Port Terminal Concession may be revoked in favor of API in the event that
IPM breaches the terms of the Altamira Port Terminal Assignment Agreement, including, if IPM does
not timely pay in full the total amount of the consideration to API and SHCP, or does not adequately
operate and preserve the container port terminal pursuant to the terms of the Altamira Port Terminal
Assignment Agreement. IPM is not entitled to receive any compensation as a result of the revocation
of the Altamira Port Terminal Assignment Agreement.

Termination. The Altamira Port Terminal Assignment Agreement will terminate automatically upon
the expiration of its term or the mutual agreement of IPM and API. In the event that the early
termination is not due to causes attributable to IPM, we could be entitled to receive compensation for
damages. In addition, upon early termination of the Altamira Port Terminal Assignment Agreement,
all machinery and equipment used in the Altamira Port Terminal must be leased on an arm's length
basis to the new operator of the container port terminal for a mandatory one-year term.
The following table sets forth average volume in respect of the Altamira Port Terminal Concession for the
GA #100224v5
periods indicated:
For the year ended December 31,
2014
2013
2012
2011
543,047
Steel (Tons) ..................................................
460,160
489,289
503,028
Containers (number of
187,379
TEU’s) ..........................................................
181,532
174,942
29,383
General Cargo (Tons) ..................................
25,430
28,454
23,569
1,521
Cars (number of units).................................
836
1,492
1,420
Average volume of:
166,930
The following table sets forth average fees in respect of the Altamira Port Terminal Concession for the
periods indicated:
For the year ended December 31,
2014
2013
2012
2011
Average fees in Ps. for :
3,172
Containers (per TEU’s) ...............................
2,947
2,771
2,448
873
Cars / Chassis (per units) .............................
1,053
807
1,006
365
General Cargo (per tons) .............................
332
381
356
Steel (per tons) .............................................
74
69
70
64
Our Other Infrastructure Operations
In addition to operating our 19 Toll Road Concessions that are currently in operation and the Morelos
Stretch, the Company operates a toll bridge located in the state of Veracruz: the “José López Portillo” bridge.
The José López Portillo bridge is a 0.59 km bridge located on the Poza Rica-Tampico toll road over the
Pantepec River, in Temapache, Veracruz. The Government of the State of Veracruz granted Consorcio de Carreteras
del Golfo, S.A. de C.V., an unrelated company, the right to operate the bridge, and pursuant to a service agreement
(Contrato de Prestación de Servicios) dated January 28, 2010, between Consorcio de Carreteras del Golfo, S.A. de
C.V. and Opervite, the operation of the José López Portillo bridge is currently carried out by Opervite. Under this
agreement, Opervite renders operation and minor maintenance services on the José López Portillo bridge. Opervite
receives annual consideration for the services rendered equal to (i) Ps.6.8 million plus VAT; and (ii) Ps.2.2 million
plus VAT, which amount shall be adjusted depending on the volume of operations conducted.
Our Manufactured Products
Through our subsidiary Grupo Corporativo Interestatal, S.A. de C.V. (“GCI”), we own and operate the
largest asphalt mix producer and supplier in Mexico City. We manufacture various products including asphalt mix
and its aggregates (crushed basalt), out of our Altipac quarry and facility (the “Altipac Plant”). The Altipac Plant is
located on the Mexico City-Puebla Federal toll road in the town of Ixtapaluca and has produced over nine million tons
of asphalt mix since 1994. Its 152 hectares have proven reserves of 61 million tons of crushed basalt which are
expected to last for the next 60 years, making it the only quarry in the greater Mexico City area with such a level of
productivity and reserves.
In addition, through our subsidiary Tribasa Construcciones, S.A. de C.V. (“TC”), we manufacture central
barriers for toll roads and other prefabricated concrete products and through our subsidiary Mexicana de Cales, S.A.
de C.V. (“MC”), we manufacture calcareous products used in urbanization and road construction.
GA #100224v5
Our main manufactured products clients include several governmental related entities including the SCT,
Mexico City’s International Airport, CAPUFE, and Comisión de Vialidad y Transporte Urbano del Distrito Federal,
as well as private companies such as Ingenieros Civiles Asociados, S.A.B. de C.V., and OHL México, S.A.B. de C.V.
For the years ended December 31, 2014 and 2013, we had consolidated revenues from our manufactured
products in an amount of Ps.474.1 million and Ps. 410.5 million, respectively, which represented 6.9% and 7.1%,
respectively, of our consolidated revenues during such periods.
Our Construction Management Services
For the years ended December 31, 2014 and 2013, we had consolidated revenues from our construction
services in an amount of Ps.1,679.2 million and Ps.1,017.6 million respectively, which represented 24.5% and 17.5%
of our respective consolidated revenues during such periods. The most recent projects in which the Company has
participated include, among others, the construction of both the Reforma Constituyentes road interchange and the
Acopilco road interchange, the extension of the Altar-Pitiquito, Tlaxcala-Puebla and Peñon-Ecatepec.
d)
OUR MAIN SUBSIDIARIES BY BUSINESS LINE
The following tables provide information concerning our main subsidiaries by business line.
Our Subsidiaries in the concession business:
Name
Grupo Concesionario de México S.A. de C.V.
Ownership %
100%
Year of
incorporation
1994
Promotora y Administradora de Carreteras, S.A. de
C.V.
Concesionaria Pac, S.A. de C.V.
100%
1989
100%
1993
Autopista Tenango-Ixtapan de la Sal, S.A. de C.V.
100%
2003
Concesionaria Monarca, S.A. de C.V.
100%
2007
Infraestructura Portuaria Mexicana, S.A. de C.V.
100%
1993
100%
2006
100%
2013
100%
2013
100%
2005
Concesionaria Zonalta, S.A. de C.V.
Vías de Comunicación del Centro y Pacífico, S.A.
de C.V.
Vías Concesionadas de Carreteras PAPSA, S.A. de
C.V.
Opervite, S. A. de C. V.
Activity
Holding company.
Construction and maintenance
of toll roads.
Construction and maintenance
of toll roads.
Construction and maintenance
of toll roads.
Construction and maintenance
of toll roads.
Construction and maintenance
of toll roads.
Construction and maintenance
of toll roads.
Construction and maintenance
of toll roads.
Construction and maintenance
of toll roads.
Operation of Toll Road
Concessions
Our Subsidiaries in the materials for sale business:
Name
Tribasa Sector Materiales e Insumos de la
Construcción S.A. de C.V.
Grupo Corporativo Interestatal, S.A. de C.V.
Tribasa Construcciones, S.A. de C.V.
Ownership %
100%
100%
100%
Year of
incorporation
1992
1985
1978
Activity
Holding company.
Production of asphalt mix.
General construction.
Our Subsidiaries in the construction business:
Name
Pinfra Sector Construcción S.A. de C.V.
Experconstructores Zacatecana, S.A. de C.V.
Adepay, S.A. de C.V.
Equivent, S.A. de C.V.
GA #100224v5
Ownership %
100%
100%
100%
100%
Year of
incorporation
1992
1969
2007
2007
Corporate purpose / Activity
Holding company.
Holding company.
Holding company
General construction.
e)
COMPETITION
We participate in the infrastructure concession market in Mexico. Our ability to grow through successful
bids for and acquisitions of new infrastructure concessions could be adversely affected by an increase in the prices of
future concessions as a result of the competition in our industry. We view our competition as including both (i) private
Mexican companies and international construction and infrastructure companies and investment funds that participate
in consortiums with local companies, such as Empresas ICA, IDEAL, Macquarie, Abertis, Globalvias, FCC,
Rodovias, Brisa, Grupo Hermes and OHL, among others, and (ii) CAPUFE, a public federal entity that operates and
provides maintenance services to federal highways and toll roads as well as participates in investment and coinvestment projects for the construction and operation of such highways and toll roads. Potential competition may
arise from other businesses interested and positioned to enter the Mexican infrastructure transport concession
business. See “Risk Factors—Risks Related to Our Business—We may not be successful in obtaining new
concessions.”
The Mexican Federal Government typically maintains toll-free roads parallel to toll roads, which serve as an
alternate route to our toll roads. We do not believe that these toll-free roads represent significant competition because
our roadways are generally the main routes and the alternative routes are limited in terms of traffic capacity and
quality.
Other modes of transportation, especially air and rail transportation, also represent possible competition.
However, historically, vehicle transportation in Mexico has been the dominant means of transporting passengers.
f)
TRADEMARKS, PATENTS AND LICENSES
We currently hold five trademarks registered, in different classes, with the Instituto Mexicano de la
Propiedad Industrial for the names and logos of “VIAPASS”, “TRIBASA”, “GIMSA”, “CIESA” and “PINFRA”.
The “VIAPASS” trademark is registered under classes 36 and 42, which classes are for financial services
and software programs, respectively, and is licensed by our subsidiary, Equivent, to Cobro Electrónico de Peaje, S.A.
de C.V., another of our subsidiaries.
The “TRIBASA”, “GIMSA” and “CIESA” trademarks are registered under class 37, which is for
construction and general third party services, respectively. Currently, we do not have any license agreements for these
trademarks.
The “PINFRA” trademark is registered under classes 37 and 45, which classes are for construction and
general third party services, respectively. Currently, we do not have any license agreements for this trademark.
Our trademark licenses are current and we expect to renew them prior to their expiration in accordance with
applicable laws. In Mexico, trademark registrations can generally be renewed indefinitely every ten years as long as
they are being used. To our knowledge, there are no disputes regarding the ownership of our trademarks. We have no
patents for our business activities.
g)
PROPERTY AND EQUIPMENT
Our subsidiaries that hold our Concessions do not own most of the assets used in the course of their business.
Generally, pursuant to the terms of the respective concessions, we have permissions to use the facilities and assets that
are transferred to our concessions, such as the toll plazas, monitoring posts, and the company headquarters. See
“Regulation.”
We own the Altipac Plant, which is located on the Mexico City-Puebla Federal Toll Road in the town of
Ixtapaluca. The Altipac Plant and has capacity to produce approximately 5,200m3 per day of asphalt mix, and has
produced over ten million tons of asphalt mix since 1993.
GA #100224v5
We also own various types of equipment related to the activities carried out by us under the Concessions and
related to the supply production activities in our factories described in foregoing paragraphs. Our equipment includes
cars and trucks utilized in the provision of security services, tractors and forklifts.
h)
ENVIRONMENTAL CONSIDERATIONS
Our Mexican operations are subject, among other environmental regulations, to Mexico’s Ley General del
Equilibrio Ecológico y Protección al Ambiente y sus Reglamentos (General Law of Ecological Equilibrium and
Environmental Protection (the “LGEEPA”) and its Regulations), Ley General para la Prevención y Gestión Integral
de los Residuos y su Reglamento (General Law for the Prevention and Integral Management of Wastes (the “Law on
Waste”) and its Regulations), Ley General de Desarrollo Forestal Sustentable y su Reglamento (General Law of
Sustainable Forestry Development (the “Law on Forestry”) and its Regulations), Ley General de Vida Silvestre y su
Reglamento (General Law of Wild Life and its Regulations), Ley de Aguas Nacionales y su Reglamento (National
Waters Law (the “Water Law”) and its Regulations), Ley General de Bienes Nacionales y sus Reglamentos (General
Law of National Assets and its Regulations) Reglamento para el Transporte Terrestre de Materiales y Residuos
Peligrosos (Regulations for the Terrestrial Transport of Hazardous Materials and Wastes), Reglamento para la
Protección del Ambiente contra la Contaminación Originada por la Emisión de Ruido (Regulations for the
Environmental Protection against Noise Pollution), several Normas Oficiales Mexicanas or NOMs (“Mexican Official
Standards”) related with our operations and numerous state and municipal environmental laws and regulations where
our projects and/or facilities are or could be installed (collectively, the “Environmental Laws”).
LGEEPA generally sets forth the legal framework applicable to the environmental impact procedure as well
as the release of contaminants to the air. Additionally, the Law on Waste regulates the generation and handling of
hazardous wastes and materials as well as the release of contaminants into the soil.
LGEEPA’s Reglamento en Materia de Evaluación del Impacto Ambiental (Regulation on Environmental
Impact Assessment), regulates the environmental impact assessment procedure which is the process through which
Mexico’s Secretaría de Medio Ambiente y Recursos Naturales (Ministry of the Environment and Natural Resources,
“SEMARNAT”) authorizes, conditions or rejects the impact to the environment that a given project may generate.
Any variations or modifications to the original project must be done pursuant to applicable environmental regulations,
which in certain cases require previous authorization from SEMARNAT or the corresponding environmental
authority.
Our projects affect certain protected natural areas governed either by SEMARNAT or local environmental
authorities and also require the removal of vegetation and trees. As a consequence, the corresponding environmental
impact authorization requires that compliance with specific and additional conditions shall be observed during the
construction and operation of our projects.
Given that certain projects require the change of forestry land use, the Law on Forestry and its Regulations
apply to these projects. The Law on Forestry and its Regulations, provide that prior to performing any activities in a
property designated to have forestry land use, an environmental impact authorization to change forestry land use shall
be obtained from SEMARNAT, which is subject to the compliance of specific terms and conditions.
Entities that wish to occupy a certain federal zone or to build any construction under or over such federal
zone must obtain an authorization to do so from Mexico’s National Water Commission (“CNA”). The Water Law
also sets forth the legal framework applicable to the discharge of waste water into federal water recipient bodies.
Some of our projects require concessions issued by CNA given the use and building of certain constructions in federal
zones governed by the CNA and the discharge of waste water into federal water recipient bodies. Concessions issued
by CNA are subject to compliance with specific terms and conditions and to the payment of federal duties. The
payment of duties needs to be duly and timely made in accordance with the Ley Federal de Derechos or Federal
Duties Law; failure to do so may result in the imposition of penalty interest and inflationary adjustments on top of
past due payments. As a consequence of the construction and operation of our projects, certain hazardous wastes are
generated, which generation, handling, transportation, storage and final disposal, among others, are governed by the
Law on Waste, which sets forth a variety of relevant obligations.
GA #100224v5
Most of the environmental concessions, authorizations and permits issued for our projects are in force for a
specific period of time which can be extended subject to the corresponding environmental authority approval. For
such purposes, the authority considers, among others, the level of compliance with the terms and conditions provided
under the concession, authorization and or permit in question.
Furthermore, the conditions and terms included in the concessions also impose on us certain environmental
obligations. As a general rule in the concessions, the party obligated to comply with terms and conditions on
environmental matters is the SCT. However, there may be concessions where the operator will be obligated to comply
with all the environmental obligations or other cases where both the SCT and the operator will be jointly responsible
for the compliance of such environmental obligations, conditions and terms.
Among the state and municipal authorities that regulate the enforcement of the environmental laws in each
of their jurisdictions, the federal environmental authority in charge of regulating the compliance of the referred rules is
SEMARNAT, who oversees the compliance and enforcement of such obligations by means of the federal agency
denominated Procuraduría Federal de Protección al Ambiente (Attorney’s General Office for the Protection of the
Environment).
Non-compliance with the applicable environmental laws, regulations and Mexican Official Standards may
result in the imposition of administrative fines or sanctions, revocations of authorizations, concessions, licenses,
permits or registries; administrative arrests; seizure of contaminating equipment; in certain cases, temporary or
permanent closure of facilities; and even imprisonment, when environmental violations are classified as criminal
offenses.
We believe that we have all material concessions, permits and authorizations for the facilities and projects
that we operate, which are in substantial compliance with applicable environmental laws, regulations, standards,
agency agreements, as well as with the conditions and terms set forth in the corresponding concessions. However, we
are in the process of obtaining an extension of the environmental impact authorization for the construction of the
Tlaxcala-Puebla Toll Road Concession, and with respect to the Ecatepec-Peñón Stretch, as well as the MarquesaLerma Stretch in the México-Toluca Toll Road Concession, we are in the process of obtaining the Release of Rights
of Way and the environmental impact authorization required for its construction.
We currently are not subject of any material legal or administrative proceedings pending against us with
respect to any environmental matters. Changes in the Mexican environmental laws, regulations and/or standards
could require us to make additional investments to remain in compliance with such environmental laws, regulations
and/or standards. Any such event could have an adverse effect on our financial condition and results of operations.
Insurance
We have obtained and maintain insurance policies covering various business risks. We believe our insurance
coverage is consistent with what other companies in our industry in Mexico maintain, but it may not be as
comprehensive as that maintained by concessionaires in other countries, in particular, the United States.
Our concession agreements obligate us to maintain insurance coverage related to our contractual obligations,
guaranteeing, for each of our concessions, the completion of expansions, maintenance of operational functions and
routine and special upkeep of our toll roads, as well as the payment of the fixed portion of the concession charge. In
connection with our concessions, we have several insurance policies in place covering, among other liabilities, civil
liability and damage to the toll roads.
i)
HUMAN RESOURCES
As of December 31, 2014, we had 2,237 employees. The following table shows the number of our full-time
employees by area of activity and our concessions as of the dates indicated:
By Activity:
Management.......................................................
GA #100224v5
As of December 31,
2014
504
As of December 31,
2013
523
As of December 31,
2012
292
As of December 31,
2011
285
Operation ............................................................
Construction and Engineering ..........................
Executive Officers .............................................
Total Employees ...............................................
By Project Allocation
Concession business ..........................................
México-Toluca ............................................
Pirámides-Ecatepec-Peñón .........................
Armería-Manzanillo ....................................
Peñón-Texcoco ............................................
Tenango-Ixtapan de la Sal ..........................
Atlixco-Jantetelco........................................
Santa Ana-Altar ...........................................
Zitácuaro-Lengua de Vaca ..........................
Morelia-Aeropuerto.....................................
El Prieto bridge ............................................
San Luis Río Colorado-Estación Doctor ...
Tlaxcala-San Martin Texmelucan
José Luís López Portillo Bridge
Corporate Concessions
Autopista Via Atlixcayotl
Autopista Virreyes-Tezihuatlan
Autopista Apizaco-Huachinango
1431
285
17
2237
1607
31
18
2,179
1805
21
16
2,134
1,537
12
12
1,846
1104
207
85
57
91
79
48
53
29
46
0
15
65
32
67
70
101
59
1084
186
87
59
94
71
47
53
28
46
0
15
63
32
70
74
101
58
1055
196
85
59
94
71
48
50
28
45
19
15
64
28
66
53
83
51
889
207
89
62
96
70
45
53
29
46
23
17
62
30
60
0
0
0
Altamira Port ...............................................
Materials for sale business ................................
Construction management business .................
Corporate (Fees) ................................................
Corporate Central ..............................................
Total employees .....................................................
773
202
39
35
84
2,237
704
253
32
24
82
2,179
680
245
22
43
89
2,134
644
182
13
41
77
1,846
As of December 31, 2014, approximately 62.9% of our employees were members of the following unions:
(i) CTM Sindicato de Trabajadores de la Industria del Cemento, Cal, Asbesto, Yeso, Envases y sus Productos
Similares y Conexos de la República Mexicana; (ii) CTC Sindicato Mexicano de Trabajadores de la construcción con
maquinaria, similares y conexos de la República Mexicana; (iii) CTM Sindicato Nacional de Trabajadores de la
Actividad Comercial y sus derivados, Agentes de Comercio, Vendedores Viajeros, Propagandistas e Impulsores de
Ventas de la República Mexicana; (iv) CTM Sindicato de trabajadores de la construcción, similares y conexos de la
República Mexicana; (v) Sindicato Progresista de Trabajadores de la Industria Portuaria Mexicana; and (vi) CTC
Sindicato Mexicano de Trabajadores de la construcción con maquinaria, similares y conexos de la República
Mexicana. Historically, our relationship with these unions has been good. Every two years, we renegotiate the terms
of our collective bargaining agreement (contrato colectivo) with these unions, while wages are reviewed on an annual
basis. See “—Labor Regulation” below.
j)
LABOR REGULATION
The Mexican Constitution (Constitución Política de los Estados Unidos Mexicanos) provides minimum
labor rights for all Mexican workers, including, among others, a maximum number of working hours during a
working day depending on the corresponding shift, a minimum wage, the right to end-of-year bonus (aguinaldo), the
right to paid vacation and a vacation bonus (prima vacacional) and the right to receive compensation in the event of
unjustified dismissal. The Federal Labor Law (Ley Federal del Trabajo) regulates such rights and the legal
proceedings regarding individual and collective work disputes in detail. All workers are entitled to receive social
security services from the Instituto Mexicano del Seguro Social or IMSS (Mexican Social Security Institute), and to
receive preferential credit for the acquisition of homes from the Instituto del Fondo Nacional de la Vivienda para los
Trabajadores or INFONAVIT (National Institute of the Workers Housing Fund). Retirement savings are also
mandatory and are regulated by the Comisión Nacional del Sistema de Ahorro para el Retiro or CONSAR (National
Commission for the Retirement Saving System). The cost for the implementation of the foregoing programs is
generally shared between the employer, the employee and the Mexican Federal Government.
GA #100224v5
All employees have the right to be part of and participate in labor unions. Labor unions are organized to
improve the rights and conditions of their members at their respective places of employment. These rights and
conditions are established in collective bargaining agreements registered with the corresponding local or federal labor
authority. The Federal Labor Law also sets forth the rights of workers to declare a strike, in the event that they believe
their rights are breached by their employers.
l)
ADMINISTRATIVE AND LEGAL PROCEEDINGS
We are involved in certain legal proceedings from time to time that are incidental to the normal conduct of
our business. In addition, in the ordinary course of our business, we are subject to various labor claims, none of which
we believe will materially affect our business, results of operations or financial condition. The material proceedings
are described below.
We are involved in certain legal actions and proceedings arising out of the ordinary course of business in an
approximate amount of Ps.55.3 million as of December 31, 2014. Our management believes, based on advice from
legal counsel, that such disputes and litigation will be resolved without any material effect on our consolidated
financial position or results of operations. Consequently, we have recorded a liability of Ps.6.81 million that our
management deems sufficient to cover existing contingencies.
We enter into various transactions with related parties, by which tax differences could arise if the tax
authorities determine that the prices and amounts used by us are not comparable to those used with or between
independent parties in comparable transactions.
Regarding the lawsuit between Mexicana de Gestión de Agua, S.A. de C. V. and the Municipal Operating
Agency of Potable Water, Drains and Sanitation of Navojoa, Sonora, our management estimates that it may receive
Ps.50.0 million for damages and losses caused by the time elapsed without having complied with the implementation
of the amparo proceeding.
Experconstructores Zacatecana, S. A. de C. V. (formerly Triturados Basálticos y Derivados, S. A. de C. V.
(TBD) (Crushed Basaltics and Derivatives, Inc.)) have an ordinary civil suit brought by Proyectos y Cimentaciones
Tacana, S. A. de C. V. (TACANA) (Tacana Projects and Foundations, Inc.) before the First District Court in Civil
Matters on April 6, 2001, whose contingency amounts to U.S.$4.75 million as of December 31, 2014, approximately;
however, upon having entered into bankruptcy in a judgment ruled on March 22, 2002, TBD considers that the
TACANA credits predate the bankruptcy and, therefore, should be subject to the provisions of the Bankruptcy Act
and in strict adherence to the settlement agreement that, upon termination of the insolvency, TBD entered into with its
creditors and was approved res judicata by the court on December 18, 2003.
An insolvency payment of 5.4% is stipulated in this agreement for the universe of unsecured bankruptcy
creditors (common creditors) by which the TACANA implementation must not violate the settlement agreement to
the detriment of the universe of bankruptcy creditors. These arguments have been expounded at trial and will be
reviewed in amparo by the collegiate courts against the final act of execution of judgment that TACANA might
promote in the future. The foregoing has been resolved in that sense by the collegiate courts in the amparo claims
brought on by TBD. In addition, as of December 31, 2014, there was an amount of Ps.51.8 million, respectively, in
restricted funds in trust with respect to this claim.
2)
MEXICAN INFRASTRUCTURE CONCESSIONS AND REGULATION
Our projects are subject to extensive Mexican federal and state governmental regulations and approvals.
This section contains an overview of the legal regime applicable to our operations in Mexico, as well as a summary of
some of the legislation applicable to our concessions and our manufactured products.
General
To promote the development of Mexico’s infrastructure without burdening the public sector’s resources and
to stimulate private-sector investment in the Mexican economy, since 1985 the Mexican Government has actively
GA #100224v5
pursued a policy of granting concessions to private parties for the construction, maintenance and operation of
infrastructure projects such as highways, bridges, tunnels and airports. These concessions are licenses of specified
duration, granted by federal, state or municipal governments to finance, build, operate, exploit and maintain
infrastructure facilities and public means of communication or transportation. In most cases, these concessions are
awarded to private parties by means of a public bid. However, in some states, local legislation enables state authority
to directly award concessions. The location and the nature of a project determine whether such project will be subject
to federal or state jurisdiction. The jurisdiction of the project determines the corresponding authority which grants the
concession, as well as the applicable legislation which regulates the process for granting the concession. For more
information on the environmental framework applicable to concessions in Mexico see “Business—Environmental
Considerations.”
The SCT is the federal governmental agency responsible for the planning and supervision of
communications and transportation infrastructure in Mexico. CAPUFE is a governmental authority that currently
operates and maintains a substantial portion of the toll roads owned by the Mexican Federal Government. Part of the
toll road system is operated by private entities and regional governmental entities.
In Mexico, the roads privatization process undertaken by the administration of the Mexican President Carlos
Salinas de Gortari between 1990 and 1994, created a 50-year private sector road concession regime involving
approximately 5,000 km of the network of federal roads out of the 224.2 thousand km that were part of the network of
federal roads in 1985. The Mexican Federal Government, State Governments and private sector entities were
involved in the privatization process.
While the Mexican Federal Government had expectations of high traffic growth during the privatization
process, vehicle traffic in roads under concession during the early 1990’s was considerably lower than expected, in
part as a result of the high tolls that were charged to motorists, which decreased demand for toll roads. In addition,
during the same time period, concessionaires faced unexpected cost increases in connection with the construction of
certain of these roads, which resulted in delays and defaults in their operation and maintenance obligations. As a
result, concessionaires were not capable of meeting their financial obligations, and incurred losses in an amount of
Ps.6.0 billion. The Mexican Federal Government recognized indebtedness for an amount of more than Ps.25.0 billion.
Considering the imminent suspension of payments of some of the concession companies and the lack of financial
resources to continue the operation and maintenance of the roads, the Mexican Federal Government instituted the
Road Rescue Program (Programa de Rescate Carretero) and on August 27, 1997, announced the recall or rescue
(rescate) of 23 out of the 52 roads under concession. As a result of the Road Rescue Program, the Mexican Federal
Government rescinded concessions and assumed the operation and control of such roads. Bank indebtedness and the
indemnity payments made by the Mexican Federal Government in connection with the rescue of the roads amounted
to Ps.58,123 million.
In order to continue the development of infrastructure projects, the Mexican Federal Government, through
BANOBRAS, a Mexican state-owned development bank, created Mexico’s Infrastructure Fund (FINRA) and the
FARAC, in order to enhance and promote the development of infrastructure projects. Among others, one of the
objectives of these entities was to promote new schemes to extend road infrastructure by promoting the construction
and exploitation of toll roads through concessions. The schemes proposed by the Mexican Federal Government
considered the following alternatives: private sector concessions, road securitizations, the public debt financing of the
related project and the issuance of long-term bonds.
The road concession regime contemplated the operation of relevant roads by consortiums formed by the
Mexican Federal Government, operating companies and private sector investors that guaranteed the long-term
profitability of the roads. Through the road concession regime, the Mexican Federal Government granted
concessions for the construction, operation, exploitation and conservation of the roads to the private sector for a term
of 20 to 30 years. The consortium would contribute the financial resources and the equity required to construct the
toll roads, which in some cases included government funding. Contributions by the Mexican Federal Government
were intended to ensure the viability of the projects and attract the participation of more capital and long-term debt.
As a result of budgetary limits and financial requirements estimated at Ps.72,000 million as of 2003, the
Mexican Federal Government and certain State Governments decided to enhance concession projects by including
consortium schemes that required the concessionaire to assume the equity investment requirements, operation costs,
GA #100224v5
repayment of the financial debt incurred in connection with the project with the cash flows generated from the
operation of the toll road, and, more recently in the case of State Government concessions, the inclusion of provisions
that guarantee a rate of return to the concessionaire through extensions of the term of the concession.
In addition to the traditional concession model for toll roads, the Mexican Federal Government created the
public/private partnership scheme to allow for private investment in toll-free roads. This scheme contemplated the
granting of 20 to 30 year concessions for (i) the operation, preservation, maintenance, upgrade and expansion of roads
and (ii) the exclusive right to execute long-term service contracts with the Mexican Federal Government. Under this
scheme, the concessionaire would be entitled to receive an integrated payment during the term of the concession,
composed of a fixed payment for highway availability and a shadow toll rate based on traffic volume.
Concerned by the effect that the global financial crisis had on the availability of credit for infrastructure
projects, in February 2008 the Mexican Federal Government, through BANOBRAS, created the Infrastructure Fund,
or FONADIN. FONADIN was created with the resources and assets of the FARAC and FINFRA, which amounted
to Ps.40,000 million. The main purpose of FONADIN is to provide subordinated debt, guarantee certain project risks
and, in some cases, provide equity, all in respect of infrastructure projects. The SCT is entitled, in coordination with
BANOBRAS, to grant concessions to construct, operate, maintain, preserve and exploit roads that form part of the
FONADIN.
In addition, BANOBRAS has broadened its scope of activities by participating with private banks in the
financing of infrastructure projects such as toll roads and water treatment plants. We believe that the financial support
from BANOBRAS and FONADIN will further enhance the continuous growth of infrastructure projects at the federal
and state levels, and, to a certain extent, supplement financing that is available from commercial banks and, in certain
circumstances, provide the conditions that enable commercial banks to participate in infrastructure projects (such as
liquidity lines, subordinated loans and guarantees).
In April 2014 the National Infrastructure Program 2014-2018 was published; which contains the main
infrastructure projects to be developed by the Federal Government. The program provides an estimated investment of
Ps.1’320,109 million in the transport and communications sectors. The program contemplates that out of the total
investment planned, 63% will be financed by public funds, however, the participation of the private sector is also
expected in order to cover and contribute the remaining 37%.
The programs established by the Federal Government, such as the National Infrastructure Program 20142018 and FONADIN, are expected to have a considerable impact on the development plans at the state level, and
constitute the main guiding principle of public policy in each state. One of the main objectives of these programs is to
have infrastructure and a modern transportation and communication logistic platform that promotes increased
competitiveness, productivity and economic and social development.Also, the National Infrastructure Program takes
into account that highway infrastructure mobilizes most of the cargo and people traveling within the country (55%
and 98% of the total, respectively). To meet this demand, the road network has 377,660 km in length, divided in
federal highways, state feeder roads, rural and improved network. Moreover, of the totality of all ports and terminals,
is worth noting the existence of four strategic ports to move commercial cargo (Altamira, Veracruz, Manzanillo and
Lázaro Cardenas). Such terminals moved 96% of container cargo, 65% of agricultural products in bulk, 40% of
mineral and 38% of general cargo.
The National Infrastructure Program 2014-2018 contemplates a total investment of 7.7 billion pesos over the
current administration’s term which will end in 2018, in a total of 743 infrastructure programs and projects, 572 of
which are strategic projects and 171 are government commitments. Additionally, within the communications and
transport sector, the National Infrastructure Program 2014-2018 includes, among others, airport infrastructure
projects, roads, ports, telecommunications, urban mass transportation, rail and logistic infrastructure. The following
table shows the estimated amount of investment and projects in these subsectors:
Subsector
GA #100224v5
Strategic Projects
Government Commitments
Total
Telecommunications
Millions of Pesos
(2014)
673,735
5
—
5
Road Infrastructure
394,981
78
73
151
Rails
142,861
4
8
12
Ports
68,124
15
6
21
Urban mass transportation
28,844
1
6
7
Logistic infrastructure
4,516
2
—
2
Airports
3,625
14
6
20
Others
3,425
1
4
5
Total
1,320,109
120
103
223
9
More than half of the 223 projects planned for the transport and communications sector, fall within the road
infrastructure projects category. The budgeted amount of investment in this subsector is approximately Ps.394,981
million. Of the 151 road infrastructure projects, 73 are government commitments and 78 are strategic projects.
While we believe the National Infrastructure Program may present opportunities for our business, we cannot
assure you the extent to which the program will be implemented or the extent to which we will benefit from it.
Toll Road Infrastructure Projects
Mexican Federal Legal Framework for our Toll Road Infrastructure Projects
The most relevant Mexican federal laws that govern our operations include, among others:
 The Roads, Bridges and Federal Passenger Transport Service Law (Ley de Caminos, Puentes y
Autotransporte Federal) (the “Roads Law”). The main purpose of the Roads Law is to regulate the
construction, operation, exploitation, conservation and maintenance of federal roads and bridges, which
are considered to be the general means of transportation throughout the country. The law also regulates
traffic, federal passenger transport services and ancillary services provided on such roads and bridges;
and
 The General Law of National Goods (Ley General de Bienes Nacionales). The main purposes of the
General Law of National Goods are, among others, (i) to determine the assets that constitute the nation’s
estate; (ii) to establish the regime that shall be applicable to goods of public domain and to the real
property of decentralized federal agencies; (iii) to set forth guidelines for the acquisition, management,
control, surveillance and transfer of federal real property, as well as local real property when not subject
to specific local regulation; and (iv) to set forth guidelines for carrying out valuations and appraisals of
national goods.
We are also subject to other laws, such as the Organic Law of the Federal Government (Ley Orgánica de la
Administración Pública Federal), the Law of Acquisitions, Leases and Public Sector Services (Ley de Adquisiciones,
Arrendamientos y Servicios del Sector Público), the Mexican Antitrust Law (Ley Federal de Competencia
Económica), the Federal Law of Administrative Law Procedures (Ley Federal de Procedimiento Administrativo), the
General Law of Means of Communications (Ley de Vías Generales de Comunicación), the Commerce Code (Código
de Comercio) and the Federal Code of Civil Procedures (Código Civil Federal y Federal de Procedimientos Civiles),
among others. We are also subject to the Environmental Protection Law (Ley General del Equilibrio Ecológico y
Protección al Ambiente) as well as other environmental laws and regulations see “Business—Environmental
Considerations.” In addition, we are subject to urban development plans (Planes de Desarrollo Urbano) that
determine local zoning and land use requirements.
Local Legal Framework for our Toll Road Infrastructure Projects
__________________________
9
Mexican National Infrastructure Program 2014-2018.
GA #100224v5
Some of the most relevant local laws that govern our operations include, among others:

For the State of Mexico, the Organic Law of the Public Administration of the State of Mexico (Ley
Orgánica de la Administración Pública del Estado de Mexico), and the Administrative Code of the State of
Mexico (Código Administrativo del Estado de México).

For the State of Puebla, the General Law of State Properties (Ley General de Bienes del Estado de Puebla),
and the Organic Law of the Public Administration of the State of Puebla (Ley Orgánica de la
Administración Pública del Estado de Puebla).

For the State of Michoacán, the Roads and Bridges Law of the State of Michoacán (Ley de Caminos y
Puentes del Estado de Michoacán de Ocampo).

For the State of Sonora, the Law of Properties and Concessions of the State of Sonora (Ley de Bienes y
Concesiones del Estado de Sonora), and the Organic Law of the Executive Branch of the State of Sonora
(Ley Orgánica del Poder Ejecutivo de Sonora).
Granting of Concessions for Infrastructure Projects
Granting of concessions for infrastructure projects
The SCT is responsible for the development of federal roads and bridges, federal passenger transport
services and ancillary services. In such capacity, it grants concessions and permits, regulates and monitors
compliance with those concessions and rules with respect to their revocation and termination.
Pursuant to the Roads Law, a concession is required in order to operate, exploit, conserve and maintain
federal roads and bridges. Concessions are granted for a term of up to 30 years, which term may be extended, under
certain circumstances, as long as an event of default attributable to the concessionaire has not occurred.
The Roads Law also establishes that concessions for the construction, operation, exploitation, conservation
and maintenance of roads and bridges are granted by means of a public bidding process, pursuant to the following
terms:

The invitation to bid shall be published by the SCT simultaneously in the Official Gazette, a newspaper
with nationwide distribution and a local newspaper of the states in which the project is to be constructed.

Interested participants shall present their proposals in closed envelopes, which shall be opened on a
previously scheduled date and in the presence of such participants.

The guidelines of the public bid shall include the technical characteristics of the construction of the project,
the duration of the concession and the quality requirements for the construction and operation of the
project.

The main considerations for awarding the concession shall be the prices and toll rates to be passed on to the
user, the technical complexity of the project and the consideration paid for the concession.

Any interested participant who provides evidence of its economic solvency and its technical, administrative
and financial ability, pursuant to the requirements established by the SCT, shall be entitled to participate in
the public bid. Interested participants must also meet other requirements set forth in the guidelines
published by the SCT.

As of the date on which the proposals are opened, and during the period of analysis of the same,
participants shall be notified of any dismissed or rejected proposals and informed of the reasons for such
dismissal or rejection.
GA #100224v5

The SCT, based on a comparative analysis of all submitted proposals, shall determine the winning proposal
and communicate its decision to all participants. The winning proposal shall be available to all other
participants for a period of 10 business days as of the date in which the decision is made public, granting
them the opportunity to express any disagreement with the decision.

A concession shall not be granted if none of the proposals meets the requirements set forth in the guidelines
for the public bid. In such an event, the public bid shall be declared deserted and a new call shall be
published.
With respect to concessions granted for projects subject to local jurisdiction, each state’s legislation
establishes its own proceedings regarding the awarding of concessions. In certain states, local legislation authorizes
the government of such state to directly award concessions.
Description of the Terms Applicable to our Toll Road Concessions
Consideration. As a consideration for the concessions of the Concessioned Toll Roads we or our
subsidiaries shall pay a percentage of the yearly gross revenue generated by the operation of the Concessioned Toll
Roads, which generally varies between 0.5% and 1%. Sometimes, additionally, we or our subsidiaries have to make
an initial payment to the authority that grants the concession, which varies in each case.
Term and Renewal. Our Toll Road Concessions have terms between 20 and 30 years. In certain cases, the
term of a concession has been extended beyond 30 years, in order to allow us to recover our investment. The duration
of each of our concessions may be extended for equal terms, so long as we are in compliance with the conditions set
forth in the corresponding concession and the extension is requested pursuant to the terms of concessions and
applicable law. The corresponding federal or local authority will decide the extension request, and set forth new
terms and conditions, taking into account, among other things, the required investment, future costs and financial
projections that it may deem relevant to determine the profitability of the concession. The remaining term of our Toll
Road Concessions is between 21 and 37 years.
Assignment of Rights. We may not assign the rights and obligations derived from our federal toll road
concessions unless: (i) we have prior written authorization from the SCT; (ii) a period of not less than three years has
elapsed since the granting of the authorization or commencement of operations; (iii) we are in compliance with our
obligations; and (iv) the assignee meets the requirements which were originally considered for the granting of the
concession.
With respect to our toll road concessions subject to local jurisdiction, we may not assign the rights and
obligations derived from such concessions unless we have prior written authorization from the corresponding local
authority.
Notwithstanding the above, our Toll Road Concessions allow us to assign our collection rights by means of
written notice to the applicable authority.
Capital Stock. Some of our concessions establish certain restrictions as to (i) modifications of the
concessionaire’s capital stock; (ii) maintenance of a certain amount of capital stock; (iii) transfer of shares
representative of the capital stock of the concessionaire; and (iv) creating liens, guarantees or security interests in
shares representing the capital stock of the concessionaire.
Termination. Generally, the term of our concessions may be terminated upon the occurrence of any of the
following events, among others: (i) expiration of the term for which the concession was granted or, if applicable, of
the corresponding extension, (ii) our renunciation of the concession; (iii) revocation of the concession, (iv) recall
(rescate) of the concession, (v) termination of the purpose for which the concession was granted and (vi) a concurso
mercantil, bankruptcy or liquidation of the concessionaire.
Revocation. Generally, our concessions may be revoked upon the occurrence of any of the following events
among others: (i) we do not comply with our obligations or conditions under the concessions, without justified cause;
GA #100224v5
(ii) we do not maintain in effect the guaranties granted pursuant to our concessions, (iii) partial or total interruption in
the operation of the toll road, without a justified cause and (iv) we charge more expensive toll rates than those
authorized by the relevant authority.
Recall of the Concession (Rescate). The federal or local government, as the case may be, has authority to
recover our concessions pursuant to the procedure set forth in the applicable legislation. A forfeiture of our
concessions shall cause the subject matter of our concessions to return to the control and administration of the
government and cause the rest of the goods, equipment and facilities to become public goods. The declaration of
forfeiture by the relevant governmental authority would also establish the compensation to which we would be
entitled, taking into consideration our investment, and other factors such as the internal rate of return determined for
the project and the depreciation of the goods, equipment and installations used for our concessions. The value of the
goods under concession may not be considered to determine such compensation. If for any reason, we do not agree
with the amount paid as compensation pursuant to the above, we may challenge the determination of the
compensation and such amount would be determined by a judge.
Dispute Resolution. In the event that technical or economic disputes arise that do not need to be resolved
administratively by the federal or local government, such dispute will be resolved in good faith in accordance with the
provisions set forth in the concession. Additionally, some of our concessions provide for a special committee to be
created for purposes of resolving such disputes. Furthermore, our concessions establish that any of the parties may
submit such dispute to the applicable Mexican courts, waiving any other jurisdiction that could be applicable to them
due to their present or future domiciles.
Granting of Concessions for Maritime Projects
Pursuant to the Ports Law, concessions granted by the SCT for the management, operation, exploitation and
construction of maritime ports shall be granted by means of a public bidding process, pursuant to the following terms:

The call to bid shall be published by the SCT, simultaneously in the Official Gazette, in a newspaper of
national distribution and in a local newspaper of the state in which the port is located or will be constructed.

The guidelines for the public bid shall contain the criteria that will be used for selecting the winner of the
bid, which will take into account the consideration offered for the grating of the concession, the proposed
quality of the services, investment commitments, operation volumes, price and tariffs for end-users, and
other conditions deemed convenient.

The SCT, based on a comparative analysis of all submitted proposals, shall determine the winning proposal
and communicate its decision to all participants. The winning proposal shall be available to the other
participants during a term of 10 days, granting them a term of 15 days as of conclusion of the first term to
challenge the award.

The SCT shall grant the concession within 15 days following the conclusion of the terms mentioned above
and an extract of the corresponding concession shall be published in the Official Gazette.

A concession shall not be granted when none of the proposals meets the requirements set forth in the
guidelines for the public bid. In this case, the public bid shall be declared and a new invitation shall be
published.

Pursuant to article 7 of the Foreign Investment Law, foreign investment in companies that have been
granted a concession for the use, operation, and exploitation of a maritime port is limited to 49% of the
company’s capital stock.
Legal Framework for the Altamira Port Terminal Concession
Some of the most relevant laws that govern our operations under the Altamira Port Terminal Concession
include, among others:

The Ports Law (Ley de Puertos) and its Regulations (Reglamento de la Ley de Puertos). The Ports Law
and its Regulations set forth the general regime for the construction, use, operation, maintenance,
exploitation, and administration of maritime ports and facilities in Mexico, as well as the rendering of port-
GA #100224v5
related services. The main purpose of the Ports Law is to promote the development, improvement and
modernization of maritime ports infrastructure in Mexico, as well as stimulating investment and healthy
competition among participants in this sector. The Ports Law establishes that all matters related to
construction, management, operation and exploitation of maritime ports shall be subject to federal
jurisdiction. Pursuant to the Ports Law, the SCT is the main authority responsible for regulating and
overseeing maritime ports, and therefore has the authority to establish the guidelines and policies for the
development of maritime ports in Mexico, and to grant, modify and revoke concessions and permits to
build, maintain, administer and operate maritime ports.

The Maritime Navigation and Trade Law (Ley de Navegación y Comercio Marítimos). The main purpose
of the Maritime Navigation and Trade Law is to regulate the means of general water communication,
navigation, maritime commerce and related services, among others.
Description of the Terms of the Altamira Port Terminal Concession
For a description of the general terms of our Altamira Port Terminal Concession, see “Business—Our Port
Terminal Concession.”
Tax Situation
The Company is taxed pursuant to the general regime provided by the Income Tax Law (Ley del Impuesto
sobre la Renta) and has no special tax benefit. It has not been subject to any special tax derived from its own activities
as of the date of this offering memorandum.
GA #100224v5
III.
1)
FINANCIAL INFORMATION
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
The following tables present our summary consolidated financial information and operating data as of the
dates and for each of the periods indicated. This information is qualified in its entirety by reference to, and should be
read together withour consolidated financial statements and is subject to what is provided in such financial statements.
The information relative the consolidated statements of results and financial position of the Company included below,
derive from our consolidated financial statements for the periods indicated.
Pursuant to the General Provisions Applicable to Securities Issuers and Other Participants in the Securities
Market (Disposiciones de Carácter General Aplicables a las Emisoras de Valores y a Otros Participantes del
Mercado de Valores), beginning on January 1, 2012, Mexican companies with securities listed on the BMV,
including Pinfra, are required to prepare and present financial information in accordance with IFRS. Accordingly, our
annual audited consolidated financial statements as of and for the year ended December 31, 2014, 2013 and 2012,
were prepared under IFRS.
Year ended December 31,
2014
2013
2012
(Ps.)
(Ps.)
(Ps.)
(in thousands)
Consolidated Statement of Income Data
Revenues
Concessions ....................................................................................
4,702,421
Materials for sale ...........................................................................
474,105
4,394,076
410,515
3,839,828
383,338
Construction ...................................................................................
1,679,173
1,017,557
370,154
Total revenues ................................................................................
6,855,699
5,822,148
4,593,320
Concessions ....................................................................................
1,397,226
Materials for sale ...........................................................................
361,374
Construction ..................................................................................
1,405,003
Total costs ......................................................................................
3,163,603
1,448,648
275,038
774,716
1,240,309
271,704
289,264
2,498,402
1,801,277
Gross profit.....................................................................................
3,692,096
3,323,746
2,792,043
Costs
Operating expenses ........................................................................29,587
Other expenses (income), net ........................................................
145,752
3,808,261
Operating income...........................................................................
GA #100224v5
37,067
(82,910)
26,192
(10,970)
3,369,589
2,776,821
Interest expense .............................................................................
1,603,286
Interest income ..............................................................................
(269,421)
Exchange (gain) loss .....................................................................
(56,794)
Net financing costs .......................................................................
1,277,071
Equity in results of associated companies ...................................
(74,527)
Income before income taxes and discontinued
operations ....................................................................................
2,605,717
1,133,544
(182,189)
(4,240)
947,115
1,218,142
(277,761)
31,104
971,485
(80,774)
(36,997)
2,503,248
1,842,333
386,339
Income tax expense ......................................................................
2,219,378
Income before discontinued operations ........................................
Discontinued operations, net .........................................................(1,453)
2,217,925
Consolidated net income ...............................................................
2,219,524
Controlling interest ........................................................................
Noncontrolling interest .................................................................. 714
2,220,238
Consolidated net income ...............................................................
Basic earnings per share ................................................................ 5.53
401,245,708
Weighted average shares outstanding (in shares) .......................
310,953
2,192,295
(1,453)
2,189,956
17,251
1,825,082
(1,741)
1,823,778
2,190,842
(886)
1,822,864
477
2,189,956
1,822,864
5.76
5.01
380,123,523
364,275,800
2014
(Ps.)
Consolidated Statement of Financial Position Data
Assets
Current assets
Cash and cash equivalents .....................................................................
Investments in securities .......................................................................
Accounts and notes receivable – net .....................................................
Inventories – net .....................................................................................
Prepaid expenses ....................................................................................
Total current assets .............................................................................
Investments in securities .......................................................................
Receivables notes long-term ..................................................................
Real estate held for future use ...............................................................
Real estate, land held for mineral deposits, machinery and
equipment - net ..................................................................................
Investment in concessions - net ............................................................
Investment in shares of associated companies ......................................
Deferred income taxes ...........................................................................
Other assets – net ...................................................................................
Assets from discontinued operations ....................................................
Total assets .............................................................................................
As of December 31,
2013
(Ps.)
(in thousands)
2012
(Ps.)
346,609
9,038,358
521,019
98,394
84,020
10,088,400
110,137
2,973,779
535,909
86,074
40,010
3,745,909
64,978
1,754,971
824,778
85,797
183,319
2,913,843
407,735
431,217
106,481
759,634
362,361
104,368
769,736
337,119
96,007
675,333
12,705,717
1,548,971
532,568
494,319
18,875
577,336
11,335,177
590,698
848,095
374,441
20,328
18,718,347
594,064
10,277,811
374,510
946,506
267,116
21,781
16,598,493
70,675
--744,059
183,741
--145,455
261,423
1,405,353
60,403
--933,206
186,953
----285,208
1,465,770
27,009,616
Liabilities and stockholders’ equity
Current liabilities
Trade accounts payable .........................................................................
Current portion of banking credits
Current portion of assigned collection rights .......................................
Interest payable .......................................................................................
Financial derivative instrument
Work provisions
Accrued expenses and taxes payable ....................................................
Total current liabilities ..........................................................................
95,699
286,242
245,874
47,884
2,315
406,241
327,194
1,411,449
Long-term liabilities
Reserve for major maintenance ............................................................
Employee retirement obligations ..........................................................
Banking credits
Assigned collection rights - net ............................................................
Total liabilities .......................................................................................
178,512
6,816
3,385,659
3,223,745
8,206,181
192,876
7,046
--8,372,310
9,977,585
111,065
5,335
--8,461,566
10,043,736
800,112
537,361
1,337,473
719,772
537,361
1,257,133
719,772
537,361
1,257,133
2,500,000
(96,622)
9,127,593
5,928,519
17,459,490
2,313
18,799,276
4,159
18,803,435
27,009,616
2,000,000
(8,944)
1,277,820
4,211,308
7,480,184
--8,737,317
3,445
8,740,762
18,718,347
Stockholders’ equity
Contributed capital
Nominal capital stock ............................................................................
Restatement for inflationary effects .....................................................
Total contributed capital ........................................................................
Earned capital
Reserve for stock acquisition ................................................................
Repurchased stock .................................................................................
Premium on stock placement ................................................................
Retained earnings ...................................................................................
Total earned capital ...............................................................................
Valuation effect of derivatives, net of tax
Controlling interest ................................................................................
Noncontrolling interest ..........................................................................
Total stockholders’ equity .....................................................................
Total ........................................................................................................
923,920
—
1,272,827
3,096,546
5,293,293
--6,550,426
4,331
6,554,757
16,598,493
The table below presents a reconciliation of our Effective Cash Flow Generation for operation activities for
the periods indicated.
2014
Net cash flows provided by operating
activities......................................................
Net cash flows used in financing
activities......................................................
Other items: Increase in share capital
GA #100224v5
Year ended December 31,
2013
(in thousands of Ps.)
2012
4,761,929
3,595,366
3,259,112
(2,253,869)
(1,391,847)
(409,057)
1,281,853
—
at subscription of shares ............................
--Effective Cash Flow Generation for
2,508,060
operation activities(1)..................................
2,203,513
1,568,202
(1)
See – “Presentation of Certain Financial Information - EBITDA and Effective Cash Flow Generation for operation activities”
The table below provides a breakdown of EBITDA.
2014
Revenues:
Our Concessions
Securitized Toll Roads ...............................................
México-Toluca ..........................................................
Peñón-Texcoco ..........................................................
Tenango-Ixtapan de la Sal ........................................
Atlixco-Jantetelco ....................................................
Santa Ana-Altar .........................................................
Pirámides-Ecatepec-Peñón .......................................
Armería-Manzanillo ..................................................
Year ended December 31,
2013
(in thousands of Ps.)
2012
4,702,421
2,367,134
1,436,043
410,926
148,416
187,362
184,387
0
0
4,394,076
2,243,231
1,360,789
393,942
141,737
173,505
173,258
0
0
3,839,828
2,133,536
1,344,430
340,312
139,449
163,073
146,272
0
0
1,509,016
455,708
400,985
35,870
24,122
142,790
192,687
108,379
88,689
59,786
0
0
1,107,522
422,522
388,698
34,926
30,518
138,014
13,817
7,720
6,218
65,089
0
0
Altamira Port Terminal .........................................................
1,612,251
478,027
451,582
35,725
16,873
142,137
204,977
120,673
95,566
66,691
0
0
723,036
641,829
598,770
Materials for Sale..................................................................
Construction ..........................................................................
Total................................................................................
474,105
1,679,173
6,855,699
410,515
1,017,557
5,822,148
383,338
370,154
4,593,320
Costs:
Our Concessions ...........................................................
Securitized Toll Roads ...............................................
México-Toluca ..........................................................
Peñón-Texcoco ..........................................................
Tenango-Ixtapan de la Sal ........................................
Atlixco-Jantetelco .....................................................
Santa Ana-Altar .........................................................
Pirámides-Ecatepec-Peñón ........................................
Armería-Manzanillo ..................................................
1,397,226
482,016
220,570
68,290
51,384
93,887
47,885
0
0
1,448,648
530,989
218,028
83,437
54,353
77,364
97,807
0
0
1,240,309
530,321
266,709
73,773
53,257
75,293
61,289
0
0
Non-Securitized Toll Roads ......................................
Pirámides-Ecatepec-Peñón .......................................
Armería-Manzanillo ..................................................
Zitácuaro-Lengua de Vaca ........................................
San Luis Río Colorado- Estación Doctor ................
Tlaxcala-San Martín Texmelucan ............................
Via Atlixcayotl (Papsa) (Vias Papsa) .......................
Virreyes-Teziutlan (Papsa) (Vias Papsa) ..................
Apizaco-Huachinango (Papsa) (Vias Papsa) ............
Opervite(1) ...............................................................................
Cenart ......................................................................................
Sapas Navojoa, Sonora ...........................................................
Altamira Port Terminal .........................................................
406,898
52,258
92,710
12,835
8,082
35,778
74,138
55,213
47,586
28,177
121
0
508,312
440,771
59,171
84,416
27,384
19,778
45,876
68,716
60,931
47,984
26,508
7
0
476,888
278,017
70,823
86,059
14,846
19,319
45,564
1,484
1,911
1,348
36,373
290
0
431,971
Materials for Sale .................................................................
Construction .........................................................................
Total ..............................................................................
361,374
1,405,003
3,163,603
275,038
774,716
2,498,402
271,704
289,264
1,801,277
Non-Securitized Toll Roads .....................................
Pirámides-Ecatepec-Peñón ......................................
Armería-Manzanillo .................................................
Zitácuaro-Lengua de Vaca .......................................
San Luis Río Colorado- Estación Doctor ...............
Tlaxcala-San Martín Texmelucan ...........................
Via Atlixcayotl (Papsa) (Vias Papsa) ......................
Virreyes-Teziutlan (Papsa) (Vias Papsa) .................
Apizaco-Huachinango (Papsa) (Vias Papsa) ...........
Opervite(1) ...............................................................................
Cenart .....................................................................................
Sapas Navojoa, Sonora ..........................................................
GA #100224v5
2014
Gross Profit:
Our Concessions ........................................................
Securitized Toll Roads ..............................................
México-Toluca .......................................................
Peñón-Texcoco .......................................................
Tenango-Ixtapan de la Sal .....................................
Atlixco-Jantetelco ..................................................
Santa Ana-Altar ......................................................
Pirámides-Ecatepec-Peñón(1) .................................
Armería-Manzanillo ...............................................
Non-Securitized Toll Roads ....................................
Pirámides-Ecatepec-Peñón ....................................
Armería-Manzanillo ...............................................
Zitácuaro-Lengua de Vaca .....................................
San Luis Río Colorado- Estación Doctor .............
Tlaxcala-San Martín Texmelucan .........................
Via Atlixcayotl (Papsa) (Vias Papsa) ....................
Virreyes-Teziutlan (Papsa) (Vias Papsa) ...............
Apizaco-Huachinango (Papsa) (Vias
Papsa) ...................................................................................
Opervite(1) ............................................................................
Cenart ...................................................................................
Sapas Navojoa, Sonora ........................................................
Year ended December 31,
2013
(in thousands of Ps.)
2012
3,305,195
1,885,118
1,215,473
342,636
97,032
93,475
136,502
0
0
2,945,428
1,712,242
1,142,761
310,505
87,384
96,141
75,451
0
0
2,599,519
1,603,215
1,077,721
266,539
86,192
87,780
84,983
0
0
1,205,353
425,769
358,872
22,890
8,791
106,359
130,839
65,460
1,068,245
396,537
316,569
8,486
4,344
96,914
123,971
47,448
829,505
351,699
302,639
20,080
11,199
92,450
12,333
5,809
47,980
38,514
(121)
0
214,724
Altamira Port Terminal ......................................................
40,705
33,278
(7)
0
4,870
28,716
(290)
0
164,941
166,799
Materials for Sale ..............................................................
Construction ......................................................................
Total ............................................................................
112,731
274,170
3,692,096
135,477
242,841
3,323,746
111,634
80,890
2,792,043
Operating expenses
Our Concessions ........................................................
Securitized Toll Roads .............................................
México-Toluca .......................................................
Peñón-Texcoco .......................................................
Tenango-Ixtapan de la Sal .....................................
Atlixco-Jantetelco ..................................................
Santa Ana-Altar ......................................................
Pirámides-Ecatepec-Peñón .....................................
Armería-Manzanillo ...............................................
13,669
1,367
1,043
318
6
0
0
0
0
17,853
5,305
284
0
0
5,021
0
0
0
24,322
5,839
148
0
0
5,691
0
0
0
Non-Securitized Toll Roads ....................................
Pirámides-Ecatepec-Peñón ....................................
Armería-Manzanillo ...............................................
Zitácuaro-Lengua de Vaca .....................................
San Luis Río Colorado- Estación Doctor .............
Tlaxcala-San Martín Texmelucan .........................
Via Atlixcayotl (Papsa) (Vias Papsa) ....................
Virreyes-Teziutlan (Papsa) (Vias Papsa) ...............
Apizaco-Huachinango (Papsa) (Vias
Papsa) ...................................................................................
Opervite(1) ............................................................................
Cenart ...................................................................................
Sapas Navojoa, Sonora ........................................................
Altamira Port Terminal ......................................................
11,117
25
0
0
0
0
0
0
0
11,522
0
0
0
0
0
0
0
16,243
0
0
0
0
0
0
0
4,453
0
6,639
1,185
0
339
0
11,183
1,026
0
325
0
15,918
2,240
Materials for Sale ..............................................................
Construction .......................................................................
14,121
1,797
17,346
1,868
401
1,469
Total ............................................................................
29,587
37,067
26,192
GA #100224v5
Other Expenses (Income), net
Our Concessions .....................................................
Securitized Toll Roads ...........................................
México-Toluca .....................................................
Peñón-Texcoco ....................................................
Tenango-Ixtapan de la Sal ..................................
Atlixco-Jantetelco ...............................................
Santa Ana-Altar ...................................................
Pirámides-Ecatepec-Peñón ..................................
Armería-Manzanillo ............................................
(57,379)
(1,228)
(547)
(424)
(69)
0
(188)
0
0
(82,825)
(933)
0
(441)
138
(443)
(187)
0
0
(23,458)
(10,271)
(9,856)
(3,709)
3,378
(76)
(8)
0
0
Non-Securitized Toll Roads ..................................
Pirámides-Ecatepec-Peñón .................................
Armería-Manzanillo ............................................
Zitácuaro-Lengua de Vaca ..................................
San Luis Río Colorado- Estación Doctor ..........
Tlaxcala-San Martín Texmelucan ......................
Via Atlixcayotl (Papsa) (Vias Papsa) .................
Virreyes-Teziutlan (Papsa) (Vias Papsa) ............
Apizaco-Huachinango (Papsa) (Vias Papsa) ......
Opervite(1) .........................................................................
Cenart ................................................................................
Sapas Navojoa, Sonora .....................................................
Altamira Port Terminal ...................................................
(56,151)
(14,394)
(520)
0
0
0
(392)
0
0
(570)
0
(40,275)
0
(81,892)
(22,506)
0
(517)
0
0
0
0
0
(2,141)
0
(56,728)
0
(12,198)
(454)
0
0
0
0
0
0
0
(1,747)
0
(9,997)
(989)
Materials for Sale ...........................................................
Construction ....................................................................
Total .........................................................................
8,421
(96,794)
(145,752)
15,950
(16,035)
(82,910)
15,293
(2,805)
(10,970)
2014
Year ended December 31,
2013
2012
Operating income:
Our Concessions
Securitized Toll Roads ...............................................
México-Toluca .........................................................
Peñón-Texcoco ..........................................................
Tenango-Ixtapan de la Sal .......................................
Atlixco-Jantetelco ....................................................
Santa Ana-Altar ........................................................
Pirámides-Ecatepec-Peñón .......................................
Armería-Manzanillo .................................................
3,348,905
1,884,979
1,214,977
342,742
97,095
93,475
136,690
0
0
3,010,400
1,707,870
1,142,477
310,946
87,246
91,563
75,638
0
0
Non-Securitized Toll Roads ......................................
Pirámides-Ecatepec-Peñón ......................................
Armería-Manzanillo .................................................
Zitácuaro-Lengua de Vaca .......................................
San Luis Río Colorado- Estación Doctor ...............
Tlaxcala-San Martín Texmelucan ...........................
Via Atlixcayotl (Papsa) (Vias Papsa) ......................
Virreyes-Teziutlan (Papsa) (Vias Papsa) .................
Apizaco-Huachinango (Papsa) (Vias Papsa) ...........
Opervite(1) ..............................................................................
Cenart .....................................................................................
Sapas Navojoa, Sonora ..........................................................
Altamira Port Terminal ........................................................
1,250,387
440,138
359,392
22,890
8,791
106,359
131,231
65,460
47,980
34,631
(121)
33,636
213,539
1,138,615
419,043
316,569
9,003
4,344
96,914
123,971
47,448
40,705
35,080
(7)
45,545
163,915
Materials for Sale ................................................................
Construction ........................................................................
Total ..............................................................................
90,189
369,167
3,808,261
102,181
257,008
3,369,589
95,940
82,226
2,776,821
Depreciation and Amortization:
Our Concessions ..........................................................
Securitized Toll Roads ................................................
México-Toluca .........................................................
Peñón-Texcoco ..........................................................
Tenango-Ixtapan de la Sal .......................................
Atlixco-Jantetelco ....................................................
255,113
117,837
53,800
7,024
3,740
40,657
314,852
130,471
66,486
8,868
3,765
38,753
278,730
157,894
74,894
24,633
6,140
38,998
GA #100224v5
2,598,655
1,607,647
1,087,429
270,248
82,814
82,165
84,991
0
0
825,460
352,153
302,639
20,080
11,199
92,450
12,333
5,809
4,870
30,138
(290)
(5,921)
165,548
Santa Ana-Altar ........................................................
Pirámides-Ecatepec-Peñón .......................................
Armería-Manzanillo .................................................
12,616
0
0
12,599
0
0
13,229
0
0
Non-Securitized Toll Roads ......................................
Pirámides-Ecatepec-Peñón ......................................
Armería-Manzanillo .................................................
Zitácuaro-Lengua de Vaca .......................................
San Luis Río Colorado- Estación Doctor ...............
Tlaxcala-San Martín Texmelucan ...........................
Via Atlixcayotl (Papsa) (Vias Papsa) ......................
Virreyes-Teziutlan (Papsa) (Vias Papsa) .................
Apizaco-Huachinango (Papsa) (Vias Papsa) ...........
Opervite(1) ..............................................................................
Cenart .....................................................................................
Sapas Navojoa, Sonora ..........................................................
Altamira Port Terminal ........................................................
105,474
15,120
13,335
1,825
1,895
11,704
32,190
10,362
11,163
7,880
0
0
31,802
135,058
15,113
44,022
1,735
2,509
12,190
32,379
9,918
10,735
6,457
0
0
49,323
81,207
14,230
45,730
1,742
3,102
12,122
0
0
0
4,281
0
0
39,629
Materials for Sale ................................................................
Construction ........................................................................
Total ..............................................................................
25,285
6,207
286,605
22,792
6,521
344,165
9,138
17,108
304,976
2014
EBITDA:
Our Concessions .........................................................
Securitized Toll Roads ..............................................
México-Toluca ........................................................
Peñón-Texcoco ........................................................
Tenango-Ixtapan de la Sal ......................................
Atlixco-Jantetelco ...................................................
Santa Ana-Altar .......................................................
Pirámides-Ecatepec-Peñón ......................................
Armería-Manzanillo ................................................
Year ended December 31,
2013
2012
3,604,018
2,002,816
1,268,777
349,766
100,835
134,132
149,306
0
0
3,325,252
1,838,341
1,208,963
319,814
91,011
130,316
88,237
0
0
2,877,385
1,765,541
1,162,323
294,881
88,954
121,163
98,220
0
0
Non-Securitized Toll Roads .....................................
Pirámides-Ecatepec-Peñón .....................................
Armería-Manzanillo ................................................
Zitácuaro-Lengua de Vaca ......................................
San Luis Río Colorado- Estación Doctor ..............
Tlaxcala-San Martín Texmelucan ..........................
Via Atlixcayotl (Papsa) (Vias Papsa) .....................
Virreyes-Teziutlan (Papsa) (Vias Papsa) ................
Apizaco-Huachinango (Papsa) (Vias
Papsa) ....................................................................................
Opervite(1) .............................................................................
Cenart ....................................................................................
Sapas Navojoa, Sonora .........................................................
Altamira Port Terminal .......................................................
1,355,861
455,258
372,727
24,715
10,686
118,063
163,421
75,822
1,273,673
434,156
360,591
10,738
6,853
109,104
156,350
57,366
906,667
366,383
348,369
21,822
14,301
104,572
12,333
5,809
Materials for Sale ...............................................................
Construction .......................................................................
Total .............................................................................
______________
115,474
375,374
4,094,866
(1)
59,143
42,511
(121)
33,636
245,341
51,440
41,537
(7)
45,545
213,238
124,973
263,529
3,713,754
4,870
34,419
(290)
(5,921)
205,177
105,078
99,334
2,806,228
Opervite is our subsidiary, through which we operate our Toll Road Concessions as well as other Infrastructure Projects we do not own.
2)
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
You should read the following discussion together with our financial statements and the accompanying
notes, which appear elsewhere in this Annual Report. All financial information included in this offering
memorandum, unless otherwise indicated, is presented in Mexican pesos.
This Annual Report contains forward-looking statements that reflect our plans, estimates and beliefs and
involve risks, uncertainties and assumptions. Our actual results could differ materially from those discussed in the
GA #100224v5
forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to,
those discussed below and elsewhere in this Annual Report, particularly in “Risk Factors.” In addition to the other
information in this Annual Report, investors should consider carefully the following discussion and the information
set forth under “Risk Factors” before investing in the Company’s Shares.
General Overview
We are one of the leading operators of infrastructure concessions in Mexico based on the number of
concessions in our portfolio. We hold 18 concessions consisting of 17 highway concessions and one port terminal.
The highway concessions include the operation of 25 toll roads (17 of which are operational and 8 are under
construction) and a toll bridge. In addition to the operation of infrastructure concessions, we are engaged in (i) the
supervision of construction, operation and maintenance of highways; and (ii) the production of asphalt and other
supplies related to road construction.
We seek to identify, invest in and efficiently operate infrastructure projects. We have a leading position in
the transportation infrastructure concession market in Mexico, where we were the first concessionaire of a toll road.
We seek to maximize shareholder return with a comprehensive and financially conservative long-term managerial
approach. Our diversified portfolio has its strength due to geographical and businesses strategies in respect of the
construction and maintenance of our concessions. We continuously search for new business opportunities that
provide an important return on assets and limit our growth opportunities to those that we believe provide a sustainable
and predictable cash flow. As a business principle, we do not incur debt directly, we rather do it through our
subsidiaries.
With our stable cash flow generation and our clear investment principles, we believe we are well positioned
to take advantage of the growing Mexican infrastructure sector. Our strong portfolio of assets with mature projects
and predictable revenue streams allows us to have a solid and sustainable cash position under which we are able to
effectively pursue investment opportunities in new projects with the potential to generate attractive rates of return,
though no assurances may be given as to being awarded such concessions or, if awarded, to actual returns to be
achieved.
Principal Factors Affecting Our Results of Operations
Traffic Volume and Toll Rates on our Toll Roads
The main driver of our revenues from our Toll Road Concessions is the number of vehicles travelling on our
toll roads. Traffic level, in turn, is driven by a number of factors, including the ability for vehicles to travel on
alternative roads and the attractiveness of the areas where our toll roads are located, alternative methods of transport,
such as air and rail transportation (the Federal Government announced a bidding process for the Mexico-Toluca train
in its National Infrastructure Plan), security conditions, general economic conditions, reduction in commercial or
industrial activities in the regions served by our toll roads and natural disasters affecting our toll roads.
Our revenues from our Toll Road Concessions are also driven by the toll rates that we charge. The terms of
our Toll Road Concessions establish that the maximum toll rate that we are able to charge on each of our toll roads,
which is set by the relevant governmental entity. We are entitled to apply discounts on the authorized toll rates and to
establish different toll rates depending on the time of day, time of year and type of vehicle as long as such toll rates do
not exceed the authorized toll rates.
Levels of Commercial Activity at our Altamira Port Terminal
The revenues generated and costs incurred at our Altamira Port Terminal are directly and positively
correlated to the level of commercial activity undertaken by transporters of goods which use our terminal to load and
unload containers for distribution in Mexico and to international destinations. Levels of commercial activity are, in
turn, affected by local and international economic conditions. For a description of risks related to decreases in
Mexican and international economic activity, see “Risk Factors”.
GA #100224v5
Our revenues from our Altamira Port Terminal are also driven by the rates that we charge for the loading and
unloading of shipments, deposits and delivery of the cargo and containers, among other services we provide under the
Altamira Port Terminal Assignment Agreement. These rates must be registered with the SCT and API at least three
business days prior to the date on which such rates are to become effective.
Expansion of our business through the acquisition of new concessions and the pursuit of business
opportunities
Among our key business strategies is the selective analysis and pursuit of new business opportunities. As
such, we expect to continuously expand our business through the acquisition of new toll road concessions, as we did
at the end of 2013 with the award of the concession for the Siglo XXI Toll Road “Jantatelco-El Higuerón” stretch and
in August, 2014, with the obtention of the Concession for the Elevated Viaduct of the Mexico-Puebla Toll Road. We
expect that the acquisition of new concessions will generate increased cash flow and thus our results of operations will
be affected to the extent that we expand our business through the acquisition of new concessions and the pursuit of
other new business opportunities.
Description of Principal Line Items
Revenues
Analysis by management with respect to overall performance of the Company’s operations is focused on
three business segments: transportation infrastructure concessions, materials and inputs for sale and the construction
management division. The revenues generated in each of these segments include concession revenues in the
concessions segment, revenues from construction and revenues from materials for sale within the materials for sale
segment.
Concession revenues are comprised of revenues generated by the operation of our concessions. These
revenues are recognized when the service is rendered. In the case of our Toll Road Concessions, we recognize
revenues at the moment the tolls are collected as the service is rendered simultaneously. In the case of our Altamira
Port Terminal, we recognize revenues when the service is rendered, and with regards to the bridge, Opervite receives
consideration for the operation and minor maintenance services rendered on a monthly basis.
Construction for engineering works represents construction-related services provided for infrastructure
projects that are not governed by a concession contract, such as the paving of or other maintenance services for
highways that are not subject to our concessions. Revenues from construction for engineering works are recognized
using the percentage-of-completion method, in an amount equal to the costs incurred through the reporting date in
proportion to the total expected costs of the project. If costs in our most recent cost estimate exceed total revenues
according to the construction contract, we recognize the expected loss immediately.
Construction for concession revenues are comprised of revenues generated by construction work (initial
construction and improvements or upgrades, if any) we perform with respect to infrastructure projects under our
concession contracts.
We recognize revenues from the concession contracts in accordance with Interpretation No.12 issued by the
International Financial Reporting Standards Interpretation Committee, “Service Concession Arrangements” (IFRIC
12) for the initial recognition of construction, additions, improvements and extensions of toll roads under concession.
This interpretation refers to the registration by private sector operators involved in providing infrastructure assets and
services to the public sector, supported by concession agreements, pursuant to which we are required to classify the
assets into financial assets, intangible assets, or a combination of both.
A financial asset is originated when the operator builds or makes improvements to the infrastructure under
concession and receives, in return, an unconditional right to receive cash or other financial asset as consideration. An
intangible asset is originated when the operator builds or makes improvements to the infrastructure under concession
and in return receives a right to charge users for the public service; this collection right does not represent an
unconditional right to receive cash as it depends on the particular use given to the asset.
GA #100224v5
This IFRIC 12 establishes that for both financial and intangible assets, revenues and costs related to the
construction or improvements should be recognized in the earnings of the periods during the construction stage. Such
construction costs form part of the related concession asset. In addition, any consideration paid to the SCT in
exchange for the concession is recognized as part of the intangible asset.
The intangible asset recognized in the statement of financial position is amortized over the term of the
concession based on the traffic volume. The estimated amortization method and useful life are reviewed at the end of
each reporting period and the effect of any change in estimate is prospectively recognized.
Non road concessions are amortized using the straight-line method considering the concession terms we
obtain.
Materials for sale includes the sale of our manufactured products including asphalt mix and its aggregates
(crushed basalt), central barriers for toll roads and other prefabricated concrete products, and calcareous products used
in urbanization and road construction. Revenues from materials for sale are recognized when the risks and rewards of
the manufactured product are transferred to our customers, which generally coincides with delivery of the product in
satisfaction of customer orders.
Costs
Principal costs related to our concessions business include amortization of our intangible concession assets
(costs capitalized within the concession assets include items such as consideration paid to obtain the concession, if
applicable, and costs to construct or improve the concessioned asset), other operating costs, minor maintenance,
insurance and bonds and reserves for major maintenance. Principal costs related to our construction services
businesses, both with respect to engineering works and with respect to construction, include subcontractor costs,
depreciation of machinery and other construction equipment designated for use in a specific construction project, setup of field offices, insurance, and project studies. Principal costs related to our materials for sale business include
costs of production, including direct labor and materials, insurance, amortization of land reserves held for mineral
deposits that were previously amortized to inventory and expensed upon sale of such inventory and depreciation of
machinery and equipment. All costs are recognized as they are incurred.
Operating expenses
The main components of our operating expenses include salaries and employee benefits, rental expense,
selling costs, general insurance and bonds, travel expenses and depreciation and amortization of assets not directly
related to a concession or project. Operating expenses are recognized as they are incurred.
Other expenses
Other expenses generally represent other gains and losses or other income and expenses incurred that are not
directly related to our core operations, but do not represent costs or operating expenses, but are still related to our
operations. These have generally included gains and losses on sales of machinery and equipment, office space rentals
and other extraordinary gains or losses in prior years.
Net financing cost
Net financing cost includes (i) interest expense incurred on the debt securities issued under our securitized
concessions, recognized as such interest becomes due and payable; (ii) interest income earned on our cash equivalents
and investments in marketable securities, recognized as such interest becomes due and receivable; and (iii) exchange
gains and losses, attributable to monetary assets and liabilities denominated in foreign currencies and UDIs,
recognized as the exchange gains or losses occur at each reporting date depending on the related exchange rate in
effect.
Preparation of Financial Statements
GA #100224v5
Our annual audited consolidated financial statements have been prepared in accordance with IFRS.
Critical Accounting Policies
In the application of our accounting policies, our management is required to make judgments, estimates and
assumptions about the carrying amounts of assets and liabilities. The estimates and associated assumptions are based
on historical experience and other factors that are considered to be relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both current and future periods.
The following are the critical judgments, apart from those involving estimations which are described below,
that our management has made in the process of applying our accounting policies and which have a significant impact
on the amounts recorded in the condensed consolidated interim financial statements:

We have assigned collection rights in securitization schemes through trusts and have determined that we
control and, therefore, consolidate such structured entities. The principal elements considered by our
management in its determination of control over the trusts are the purpose and design of the trusts, such
that a significant portion of the trusts’ activities are conducted on our behalf, as well as our exposure and
rights to variability of returns from our involvement with the trusts. Consequently, we recognize the
revenues, costs and expenses of the toll roads and interest generated by the securitization certificates in
our results as revenues from toll roads and operating costs and expenses and interest expense,
respectively.

We have accumulated recoverable tax losses, whose recoverability must be evaluated before the
recognition of a deferred income tax asset. Such calculation has a particular impact on the determination
of the portions of the fiscal losses considered as recoverable.
The sources of key uncertainty in the estimates made at the date of the statement of financial position, which
have a significant risk of resulting in an adjustment in the carrying values of assets and liabilities during the following
financial period, are as follows:

We revise the estimate of the useful life and amortization method of our intangible assets from
concessions at the end of each reporting period and the effect of any change in the estimate is recorded
prospectively. Furthermore, at the end of each period, we review the carrying values of our tangible and
intangible assets in order to determine whether there is any indicator that they have suffered a loss from
impairment.

Our management makes an estimate to determine and recognize the provision for maintenance
requirements and repair expenses of the concessioned toll roads, which affects the results of the periods
from the time that the concessioned toll roads are available for use until the aforementioned
maintenance and/or repair work is performed.

We recognize a profit margin in the revenues and costs from construction, improvements and restoration
work. The fair value of the services rendered to the concessionaire is equivalent to the amount collected
by the subcontractor from us, plus a profit margin.
Results of operations for the period ended December 31, 2014 compared to the period ended December 31,
2013.
Revenues
Our revenues for the period ended on December 31, 2014 amounted up to Ps.6,855.7 million which
representes an increase of 17.8% in regards to the Ps.5,822.1 million for the period ended on December 31, 2013.
GA #100224v5
This increase was due to the increase in revenues from all of our sectors in the Company. The following table sets
forth our revenues by business for the periods indicated.
Revenues
Three months ended March 31,
2014
(in thousands of Ps., except percentages)
% of Total
% Change from
Revenues
Prior Period
Revenues
$4,394,076
68.59%
7.02%
2013
% of Total
Revenues
75.5%
$4,702,421
Concessions ...................................................
$3,752,247
64.5%
58.04%
6.05%
Toll Road Concessions .......................... $3,979,385
$2,243,231
38.5%
34.53%
5.52%
Securitized Toll Roads .................... $2,367,134
$1,509,016
25.9%
23.52%
6.84%
Non-Securitized Toll Roads (1).......... $1,612,251
$641,829
11.0%
10.55%
12.65%
Altamira Port Terminal ......................... $723,036
Materials for sale ............................................ $474,105
6.92%
15.49%
$410,515
7.1%
$1,017,557
17.5%
24.49%
65.02%
Construction for engineering works ................. $1,679,173
$5,822,148
100.00%
100.00%
17.75%
Total ..................................................... 6,855,699
______________
(1)
Includes revenues generated by Opervite, our subsidiary through which we operate our Toll Road Concessions as well as other Infrastructure
Projects we do not own.
Revenues from Concessions
Our revenues from concessions increased 7.0% from Ps.4,394.1 million for the period ended on December
31, 2013 to Ps.4,702.4 million for the period ended on December 31, 2014. This result was due to an increase in
revenues from both our Toll Road Concessions and the Altamira Port Terminal Concession. Revenue generated by
the Toll Road Concessions increased 6.1% from Ps. 3,979.4 million for the period concluded on December 31, 2014
in regards to the Ps.3,752.2 million generated for the period ended on December 31, 2013.
This increase, was mainly because of (i) the increase in 6% in the average daily income of our Toll Road
Concessions, as well as a decrease in transit in the Mexico-Toluca toll road derived from the conclusion of the works
in the toll free road on the first quarter of the year, which caused drivers to go back to the free toll highway and their
usual routine.
Year ended on March 31,
2014
Revenues
2013
(in thousands of Ps., except percentages)
% of Total
% Change
Concession
from Prior
Revenues
Period
Revenues
% of Total
Concession
Revenues
Toll Road Concessions
Peñón-Texcoco .............................................
2,367,134
1,436,043
410,926
50.34%
30.54%
8.74%
5.52%
5.53%
4.31%
$2,243,231
$1,360,789
$393,942
51.1%
31.0%
9.0%
Tenango-Ixtapan de la Sal .............................
148,416
3.16%
4.71%
$141,737
3.2%
Atlixco-Jantetelco .........................................
187,362
3.98%
7.99%
$173,505
4.0%
Santa Ana-Altar ............................................
184,387
3.92%
6.42%
$173,258
3.9%
Non-Securitized ............................................
1,612,251
34.29%
6.84%
$1,509,016
34.3%
Pirámides-Ecatepec-Peñón ............................
478,027
10.17%
4.90%
$455,708
10.4%
Armería-Manzanillo ......................................
451,582
9.60%
12.62%
$400,985
9.1%
Zitácuaro-Lengua de Vaca .............................
San Luis Río Colorado-Estación Doctor .........
San Martín Texmelucan – Tlaxcala ................
Via Atlixcayotl .............................................
Virreyes-Teziutlan ........................................
Apizaco-Huachinango ...................................
Opervite(1).....................................................
Altamira Port Terminal ...............................
35,725
16,873
142,137
204,977
120,673
95,566
66,691
723,036
0.76%
0.36%
3.02%
4.36%
2.57%
2.03%
1.42%
15.38%
-0.40%
-30.05%
-0.46%
6.38%
11.34%
7.75%
11.55%
12.65%
$35,870
$24,122
$142,790
$192,687
$108,379
$88,689
$59,786
$641,829
0.8%
0.6%
3.3%
4.4%
2.5%
2.0%
1.4%
14.6%
Securitized..................................................
México-Toluca .............................................
GA #100224v5
Year ended on March 31,
2014
Revenues
(in thousands of Ps., except percentages)
% of Total
% Change
Concession
from Prior
Revenues
Period
Revenues
4,702,421
Total ..........................................................
2013
100%
7.02%
% of Total
Concession
Revenues
$4,394,076
100.00%
______________
(1)
Opervite is our subsidiary, through which we operate our Toll Road Concessions as well as other Infrastructure Projects we do not own.
The following table sets forth our average daily traffic by, and Average Daily Income for, vehicle
equivalents for each of our Toll Road Concessions for the periods indicated. Although in certain cases traffic
equivalents may have decreased, average daily income increased as a result of an increase in tariffs charged to users
of the concessions.
Average
Daily Traffic
by Vehicle
Equivalents
Toll Road Concessions
México-Toluca .......................................
57,124
Peñón-Texcoco .......................................
28,730
Tenango-Ixtapan de la Sal .......................
5,067
Atlixco-Jantetelco ...................................
3,702
Santa Ana-Altar ......................................
3,884
Pirámides-Ecatepec-Peñón ......................
20,478
Armería-Manzanillo ................................
5,815
Zitácuaro-Lengua de Vaca .......................
2,995
Morelia-Aeropuerto(1) ..............................
435
San Luis Rio Colorado-Estación
6,080
Doctor .................................................
Tlaxcala – San Martín Texmelucan ..........
3,196
Apizaco – Huauchinango.........................
5,258
Via Atlixcáyotl .......................................
17,924
Virreyes - Teziutlán Texmelucan .............
57,124
Average Total ............................................... 160,687.6
Three months ended March 31,
2014
2013
Average Daily
Average Daily
Average
% Change
Income (in
% Change
Traffic by
Daily Income
from Prior
thousands of
from
Vehicle
(in thousands
Period
Ps.)
Prior Period
Equivalents
of Ps.)
0.2%
-2.4%
-5.2%
3.9%
0.2%
1.5%
3.7%
-4.3%
-80.9%
$3,934
$1,126
$407
$578
$516
$1,313
$1,251
$98
$46
5.5%
4.3%
4.8%
8.3%
6.8%
4.8%
12.4%
-0.1%
-64.1%
962.9%
$389
499.1%
-49.6%
97.7%
0.0%
1542.9%
-0.4%
$262
$562
$331
$$3,934
-33.0%
131.1%
-37.4%
-100.0%
-61.9%
56,999
29,424
5,343
3,563
3,876
20,169
5,606
3,130
2,281
572
$3,728
$1,079
$388
$534
$483
$1,253
$1,113
$98
$127
$65
6,348
2,659
17,931
3,477
161,385
$391
$243
$528
$297
$10,328
______________
(1)
We only have a 50% interest in the concessionaire that holds the concession this toll road. Accordingly, it is not consolidated in our financial
statements our investment in the concessionaire is recognized as an equity method investment.
Revenues from Materials for Sale
Our revenues from materials for sale increased 6.9%, from Ps.410.5 million for the period ended on
December 31, 2013 to Ps.474.1 million for the period ended December 31, 2014, as a result of the reactivation of the
paving market within Mexico City and its surrounding areas.
Revenues from Construction
Our revenues from construction increased 65.0%, from Ps.1,017.6 million for the period ended on December
31, 2013 to Ps.1,679.2 million for the period ended on December 31, 2014. This increase, as a result of the
construction works in the Reforma-Constituyentes, Acopilco, Marquesa-Lerma and Tlaxcala-Puebla exchange roads.
Costs
Our costs increased 26.6%, from Ps.2,498.4 million for the period ended on December 31, 2013 to
Ps.3,163.6 million for the period ended on December 31, 2014. This increase was primarily due to increases in costs
GA #100224v5
incurred by our construction of concessions and materials for sale businesses as a result of increases in revenues in
such businesses.
The following table sets forth our costs by business for the periods indicated.
Year ended December 31,
2014
(in thousands of Ps., except percentages)
% Change from
% of Total Costs
Prior Period
Costs
44.17%
-3.55%
1,448,648
28.10%
-8.53%
971,760
15.24%
-9.22%
530,989
12.86%
-7.68%
440,771
16.07%
6.59%
476,888
11.42%
31.39%
275,038
44.41%
81.36%
774,716
100.00%
26.63%
2,498,402
2013
Costs
% of Total Costs
Concessions .................................................... 1,397,226
58.0%
Toll Road Concessions
888,914
38.9%
Securitized Toll Roads...................... 482,016
21.3%
Non-Securitized Toll Roads (1) ........... 406,898
17.6%
Altamira Port Terminal.......................... 508,312
19.1%
Materials for sale ............................................ 361,374
11.0%
Construction ................................................... 1,405,003
31.0%
Total ..................................................... 3,163,603
100.0%
______________
(1)
Includes costs incurred by Opervite, our subsidiary through which we operate our Toll Road Concessions as well as other Infrastructure
Projects we do not own.
Costs from Concessions
Our costs from concessions decreased 3.5%, from Ps.1,448.7 million for the period ended on December 31,
2013 to Ps.1,397.2 million for the period ended on December 31, 2014. This reduction was mainly due to the
operative deficiency of the toll roads.
The following table sets forth our costs from concessions for each of our concessions for the periods
indicated.
Costs
Toll Road Concessions
Securitized .............................................
México-Toluca ................................
Peñón-Texcoco................................
Tenango-Ixtapan de la Sal ................
Atlixco-Jantetelco............................
Santa Ana-Altar...............................
482,016
220,570
68,290
51,384
93,887
47,885
Year ended December 31,
2014
(in thousands of Ps., except percentages)
% of Total
% Change
Concession
from Prior
Costs
Period
Costs
34.50%
15.79%
4.89%
3.68%
6.72%
3.43%
-9.22%
1.17%
-18.15%
-5.46%
21.36%
-51.04%
2012
% of Total
Concession Costs
530,989
218,028
83,437
54,353
77,364
97,807
Non-Securitized .....................................
406,777
29.11%
-7.71%
440,771
Pirámides-Ecatepec-Peñón ..................
52,258
3.74%
-11.68%
59,171
Armería-Manzanillo ...........................
92,710
6.64%
9.83%
84,416
Zitácuaro-Lengua de Vaca ..................
12,835
0.92%
-53.13%
27,384
San Luis Río Colorado-Estación
Doctor .............................................
8,082
0.58%
-59.14%
19,778
San Martín Texmelucan – Tlaxcala ......
35,778
2.56%
-22.01%
45,876
Via Atlixcayotl ...................................
74,138
5.31%
7.89%
68,716
Virreyes-Teziutlan ..............................
55,213
3.95%
-9.38%
60,931
Apizaco-Huachinango.........................
47,586
3.41%
-0.83%
47,984
Opervite(1)..................................................
28,177
2.02%
6.30%
26,515
Altamira Port Terminal ...............................
508,312
36.38%
6.59%
476,888
Total ..........................................................
1,397,226
100.00%
-3.55%
1,448,648
______________
(1)
Opervite is our subsidiary, through which we operate our Toll Road Concessions as well as other Infrastructure Projects we do not own.
36.7%
15.1%
5.8%
3.8%
5.3%
6.8%
30.4%
4.1%
5.8%
1.9%
1.4%
3.2%
4.7%
4.2%
3.3%
1.8%
32.9%
100.0%
Costs from Materials for Sale
Our costs from materials for sale increased 31.4%, from Ps.275.0 million for the year ended December 31,
GA #100224v5
2013 to Ps.361.4 million for the year ended December 31, 2014. This increasewas mainy due to an increase in hot
mix asphalt sales as a result of an increase in demand for such materials in connection with ongoing maintenance of
roadways and other road infrastructure projects in Mexico City and the surrounding areas.
Costs from Construction
For the year ended December 31, 2014, our costs from construction were Ps.1,405.0 million, an increase of
81.4% from Ps.774.7 million during the year ended December 31, 2013. This increase can be attributed to an
increase of construction work for the Reforma-Constituyentes, Acopilco, Marquesa-Lerma and Tlaxcala-Puebla
exchange-roads.
Gross Profit
Our gross profit was Ps.3,692.1 million for the year ended December 31, 2014, a 11.1% increase from
Ps.3,323.7 million for the year ended December 31, 2013. This increasewas principally due to (i) a 12.2% increase in
gross profit from our concessions from Ps.2,945.4 million during the year ended December 31, 2013 to Ps.3,305.2
million during the year ended December 31, 2014, (ii) a 16.8% decrease in gross profit from our materials for sale
business from Ps.135.5 million during the year ended December 31, 2013 to Ps.112.7 million during the year ended
December 31, 2014, and (iii) a 12.9% increasein gross profit from our construction for engineering works business,
from Ps.242.8 million during the year ended December 31, 2013 to Ps.274.2 million during the year ended December
31, 2014.
The table below sets forth our gross profit and gross margin by business for the periods indicated.
Year ended December 31,
2013
2012
(in thousands of Ps., except percentages)
% of Total
% Change
Gross
from Prior
Gross
% of Total
Gross
Gross Profit
Profit
Period
Margin
Gross Profit Gross Profit
Margin
Concessions ....................................................
3,305,195
89.52%
12.21%
70.29%
2,945,428
88.6%
67.0%
Toll Road Concessions ..........................
3,090,471
83.71%
11.15%
77.66%
2,780,487
83.7%
74.1%
Securitized Toll Roads ....................
1,885,118
51.06%
10.10%
79.64%
1,712,242
51.5%
76.3%
Non-Securitized Toll
Roads(1) ..........................................................
1,205,353
32.65%
12.83%
74.76%
1,068,245
32.1%
70.8%
Altamira Port Terminal.......................... 214,724
5.82%
30.18%
29.70%
164,941
5.0%
25.7%
Materials for sale ............................................ 112,731
3.05%
-16.79%
23.78%
135,477
4.1%
33.0%
Construction ................................................... 274,170
7.43%
12.90%
16.33%
242,841
7.3%
23.9%
Total .....................................................
3,692,096
100%
11.08%
53.85%
3,323,746
100.0%
57.1%
______________
(1)
Includes gross profit from Opervite, our subsidiary through which we operate our Toll Road Concessions as well as other Infrastructure Projects we
do not own.
Operating Expenses
Our operating expenses for the year ended December 31, 2014 were Ps.29.6 million, a decrease of 20.2%
from Ps.37.0 million for the year ended December 31, 2013. This decrease was due primarily to a general decrease in
operating expenses as a part of our normal and ongoing operations.
Other Income
Our other income increased 75.8% from Ps.82.9 million for the year ended December 31, 2013 to Ps.145.8
million for the year ended December 31, 2014. This change was due to an increase of the advisory services rendered
to the operating companies of the Paquete Michoacán.
Net Financing Costs
Our net financing cost for the year ended December 31, 2014 was Ps.1,271.1 million, an increase of 34.8%
GA #100224v5
from Ps.947.1 million for the year ended December 31, 2013. This increase was primarily the result of lower interest
expense derived from a lower inflation rate in interest rates applicable to our securitization obligations, from 3.777%
for the year ended December 31, 2013 to [*]% for the year ended December 31, 2014. Given that our securitization
obligations are denominated in UDIs, a decrease in the rate of inflation also decreases the interest rate on such
obligations as well as the peso-value of our debt. On the contrary, an increase in the inflation rate increases amounts
payable by us under our UDI denominated indebtedness. The following table sets forth a breakdown of our net
financing costs for the periods indicated.
Year ended December 31,
2013
(in thousands of Ps., except percentages)
% Change from Prior
Period
1,603,286
41.4%
(269,421)
47.9%
(56,794)
1,261.5%
1,277,071
34.8%
Interest expense .........................
Interest income ..........................
Exchange rate loss (gain)............
Total.........................................
2012
1,133,544
(182,189)
(4,240)
947,115
Income Tax Expense
Our income tax expense for the year ended December 31, 2014 increasedto Ps.386.3 million, from Ps.310.9
million during the year ended December 31, 2013, due to the fact that in 2013 we amortized the tax losses that had
been reserved, in connection with the revenues generated by the Paquete Puebla toll roads.
Consolidated Net Income
For the reasons set forth above, our consolidated net income for the year ended December 31, 2014 was
Ps.2,217.9 million, a 1.3% increase from the Ps.2,189.1 million for the year ended December 31, 2013.
Basic Earnings per Common Share
Our basic earnings per common share for the year ended December 31, 2014 was Ps.5.53 per share, a 4.0%
decrease from Ps.5.76 per share for the year ended December 31, 2013, without including the offering of the Series L
Shares, the profit per share would have been of $5.84 which represents a 1.4%.
Results of operations for the y ended December 31, 2013 compared to the year ended December 31, 2012.
Revenues
Our revenues increased 26.8%, from Ps.4,593.3 million for the year ended December 31, 2012 to Ps.5,822.1
million for the year ended December 31, 2013, due to increases in revenues from all of our business segments.
The following table sets forth our revenues by business for the periods indicated.
Revenues
Concessions ....................................................
Toll Road Concessions...........................
Securitized Toll Roads .....................
Non-Securitized Toll Roads(1)...........
Altamira Port Terminal ..........................
Materials for sale .............................................
Construction....................................................
GA #100224v5
Year ended December 31,
2013
(in thousands of Ps., except percentages)
% of Total
% Change from
Revenues
Prior Period
Revenues
2012
% of Total Revenues
4,394,076
75.5%
14.4%
3,839,828
83.6%
3,752,247
2,243,231
1,509,016
641,829
410,515
1,017,557
64.5%
38.5%
25.9%
11.0%
7.1%
17.5%
15.8%
5.1%
36.3%
7.2%
7.1%
174.9%
3,241,058
2,133,536
1,107,522
598,770
383,338
370,154
60.5%
46.4%
24.1%
13.0%
8.4%
8.1%
Year ended December 31,
2013
2012
(in thousands of Ps., except percentages)
% of Total
% Change from
Revenues
Prior Period
Revenues
% of Total Revenues
100.0%
26.8%
4,593,320
100.0%
Revenues
5,822,148
Total ......................................................
______________
(1)
Includes revenues generated by Opervite, our subsidiary through which we operate our Toll Road Concessions as well as other Infrastructure
Projects we do not own.
Revenues from Concessions
Our revenues from concessions increased 14.4%, from Ps.3,389.8 million for the year ended December 31,
2012 to Ps.4,394.1 million for the year ended December 31, 2013, due to increases in our revenues from both our Toll
Road Concessions and the Altamira Port Terminal Concession. We generated Ps.3,752.2 million in revenues from
our Toll Road Concessions for the year ended December 31, 2013, a 15.8% increase as compared to Ps.3,241.1
million for the year ended December 31, 2012.
This increase was mainly due to (i) a 6.9% increase in the average daily income on our Toll Road
Concessions (ii) a full year of revenue from the operation of the Paquete Puebla toll roads in 2013 (as opposed to 20
days of operation in 2012), which had an increase in its revenues from Ps.27.8 million for the year ended December
31, 2012 to Ps. 389.8 million for the year ended December 31, 2013, (iii) a 15.8% increase in revenue from the
Peñón-Texcoco Toll Road Concession, and (iv) a 7.2% increase in revenue from the Altamira Port Terminal
Concession, as a result of an increase in the general cargo serviced.
The following table sets forth our revenues from concessions for each of our concessions for the periods
indicated.
Revenues
Toll Road Concessions
Securitized .........................................................2,243,231
México-Toluca ......................................
1,360,789
Peñón-Texcoco ......................................
393,942
Tenango-Ixtapan de la Sal ......................
141,737
Atlixco-Jantetelco ..................................
173,505
Santa Ana-Altar .....................................
173,258
Year ended December 31,
2013
(in thousands of Ps., except percentages)
% of Total
% Change
Concession
from Prior
Revenues
Period
Revenues
2012
% of Total
Concession
Revenues
51.1%
31.0%
9.0%
3.2%
4.0%
4.0%
5.1%
1.2%
15.8%
1.6%
6.4%
18.5%
2,133,536
1,344,430
340,312
139,449
163,073
146,272
55.6%
35.0%
8.9%
3.6%
4.3%
3.8%
1,509,016
455,708
400,985
35,870
34.3%
10.4%
9.1%
0.8%
36.3%
7.9%
3.2%
2.7%
1,107,522
422,522
388,698
34,926
28.8%
11.0%
10.1%
0.9%
24,122
0.6%
(21.0)%
30,518
0.8%
142,790
192,687
108,379
88,689
59,786
3.3%
4.4%
2.5%
2.0%
1.4%
3.5%
1,294.6%
1,303.9%
1,326.3%
(8.2)%
138,014
13,817
7,720
6,218
65,089
3.6%
0.4%
0.2%
0.2%
1.7%
Altamira Port Terminal ........................................... 641,829
Total ......................................................................4,394,076
14.6%
100%
7.2%
14.4%
598,770
3,839,828
15.6%
100.0%
Non-Securitized ........................................
Pirámides-Ecatepec-Peñón......................
Armería-Manzanillo ...............................
Zitácuaro-Lengua de Vaca ......................
San Luis Río Colorado-Estación
Doctor ..............................................
San Martín Texmelucan – Tlaxcala .........
Via Atlixcayotl ......................................
Virreyes-Teziutlan .................................
Apizaco-Huachinango ............................
Opervite(1) .............................................
______________
(1)
Opervite is our subsidiary, through which we operate our Toll Road Concessions as well as other Infrastructure Projects we do not own.
The following table sets forth our average daily traffic by, and Average Daily Income for, vehicle
equivalents for each of our Toll Road Concessions for the periods indicated. Although in certain cases traffic
equivalents may have decreased, average daily income increased as a result of an increase in tariffs charged to users
GA #100224v5
of the concessions.
(1)
We only have a 50% interest in the concessionaire that holds the concession this toll road. Accordingly, it is not consolidated in our financial
Average
Daily Traffic
by Vehicle
Equivalents
Year ended December 31,
2013
Average Daily
% Change
Income (in
% Change
from Prior
thousands of
from
Period
Ps.)
Prior Period
2012
Average Daily
Average
Traffic by
Daily Income
Vehicle
(in thousands
Equivalents
of Ps.)
Toll Road Concessions
México-Toluca ........................................
56,999
(2.5)%
3,728
1.5%
58,473
3,673
Peñón-Texcoco ........................................
29,424
(6.0)
1,079
16.0
31,315
930
Tenango-Ixtapan de la Sal ........................
5,343
(6.7)
388
1.8
5,724
381
Atlixco-Jantetelco ....................................
3,563
(1.4)
534
6.8
3,614
500
Santa Ana-Altar .......................................
3,876
(6.4)
483
20.5
4,143
401
Pirámides-Ecatepec-Peñón .......................
20,169
(4.5)
1,253
8.2
21,125
1,158
Armería-Manzanillo ................................
5,606
(3.4)
1,113
3.6
5,805
1,074
Zitácuaro-Lengua de Vaca .......................
3,130
(1.1)
98
3.2
3,165
95
Morelia-Aeropuerto1 ................................
2,281
(5.8)
127
(2.3)
2,422
130
San Luis Rio Colorado-Estación Doctor ....
572
(19.9)
65
(21.7)
714
83
Tlaxcala – San Martín Texmelucan ...........
6,348
(1.6)
391
3.71
6,454
377
Apizaco – Huauchinango .........................
2,659
(11.9)
243
(6.2)
3,019
259
Via Atlixcáyotl ........................................
17,931
(14.2)
528
(8.3)
20,896
576
Virreyes - Teziutlán Texmelucan ..............
3,477
(12.0)
297
(7.8)
3,952
322
161,385
10,328
170,822
9,665
(5.5)%
6.9%
Average Total ...............................................
statements our investment in the concessionaire is recognized as an equity method investment.We only have a 50% stake in this toll road, therefore
we do not include it in our consolidated financial statements.
Revenues from Materials for Sale
Our revenues from materials for sale increased 7.1%, from Ps.383.3 million for the year ended December
31, 2012 to Ps.410.5 million for year ended December 31, 2013, as a result of a reactivation in the paving market
within Mexico City and its surrounding areas.
Revenues from Construction
Our revenues from construction increased 174.9%, from Ps.370.2 million for the year ended December 31,
2012 to Ps.1,017.6 million for the year ended December 31, 2013. This increase was a result of the construction of
the Reforma-Constituyentes and Acopilco exchange-roads as well as the ongoing construction of the Tlaxcala-Puebla
toll road.
Costs
Our costs increased 38.7%, from Ps.1,801.3 million for the year ended December 31, 2012 to Ps.2,498.4
million for the year ended December 31, 2013. This increase was primarily due to our increased participation in the
construction segment of our business and to the first full year of operations of the toll roads located in the State of
Puebla, which had an increase in costs from Ps.4.7 million for the year ended December 31, 2012 to Ps.177.6 million
for the year ended December 31, 2013.
The following table sets forth our costs by business for the periods indicated.
Concessions ....................................................
Toll Road Concessions
Securitized Toll Roads......................
Non-Securitized Toll Roads (1) ...........
Altamira Port Terminal..........................
Materials for sale ............................................
GA #100224v5
Year ended December 31,
2013
2012
(in thousands of Ps., except percentages)
% Change from
Costs
% of Total Costs
Prior Period
Costs
% of Total Costs
1,448,648
58.0%
16.8%
1,240,309
68.9%
971,760
38.9%
20.2%
808,338
44.9%
530,989
21.3%
0.1%
530,321
29.4%
440,771
17.6%
58.5%
278,017
15.4%
476,888
19.1%
10.4%
431,971
24.0%
275,038
11.0%
1.2%
271,704
15.1%
Year ended December 31,
2013
2012
(in thousands of Ps., except percentages)
% Change from
Costs
% of Total Costs
Prior Period
Costs
% of Total Costs
774,716
31.0%
167.8%
289,264
16.1%
2,498,402
100.0%
38.7%
1,801,277
100.0%
Construction ...................................................
Total .....................................................
______________
(1)
Includes costs incurred by Opervite, our subsidiary through which we operate our Toll Road Concessions as well as other Infrastructure
Projects we do not own.
Costs from Concessions
Our costs from concessions increased 16.8%, from Ps.1,240.3 million for the year ended December 31, 2012
to Ps.1,448.7 million for the year ended December 31, 2013. This increase is substantially derived from the fact that
we operated the Paquete Puebla toll roads for the first full year; consequently we reported the costs associated with the
operation of such toll roads.
The following table sets forth our costs from concessions for each of our concessions for the periods
indicated.
Costs
Toll Road Concessions
Securitized .............................................
México-Toluca ................................
Peñón-Texcoco................................
Tenango-Ixtapan de la Sal ................
Atlixco-Jantetelco............................
Santa Ana-Altar...............................
Non-Securitized .....................................
Pirámides-Ecatepec-Peñón ..................
Armería-Manzanillo ...........................
Zitácuaro-Lengua de Vaca ..................
San Luis Río Colorado-Estación
Doctor .............................................
San Martín Texmelucan – Tlaxcala ......
Via Atlixcayotl ...................................
Virreyes-Teziutlan ..............................
Apizaco-Huachinango.........................
Opervite(1)..................................................
Year ended December 31,
2013
(in thousands of Ps., except percentages)
% of Total
% Change
Concession
from Prior
Costs
Period
Costs
2012
% of Total
Concession Costs
530,989
218,028
83,437
54,353
77,364
97,807
36.7%
15.1%
5.8%
3.8%
5.3%
6.8%
0.1%
(18.3)%
13.1%
2.1%
2.8%
59.6%
530,321
266,709
73,773
53,257
75,293
61,289
42.8%
21.5%
5.9%
4.3%
6.1%
4.9%
440,771
59,171
84,416
27,384
30.4%
4.1%
5.8%
1.9%
58.5%
(16.5)%
(1.9)%
84.5%
277,727
70,823
86,059
14,846
22.4%
5.7%
6.9%
1.2%
19,778
45,876
68,716
60,931
47,984
26,515
1.4%
3.2%
4.7%
4.2%
3.3%
1.8%
2.4%
0.7%
4,530.5%
3,088.4%
3,459.6%
(27.1)
19,319
45,564
1,484
1,911
1,348
36,373
1.6%
3.7%
0.1%
0.2%
0.1%
0.0%
Altamira Port Terminal ...............................
476,888
32.9%
10.4%
431,971
Total ..........................................................
1,448,648
100.0%
16.8%
1,240,309
______________
(1)
Opervite is our subsidiary, through which we operate our Toll Road Concessions as well as other Infrastructure Projects we do not own.
34.8%
100.0%
Costs from Materials for Sale
Our costs from materials for sale increased 1.2%, from Ps.271.7 million for the year ended December 31,
2012 to Ps.275.0 million for the year ended December 31, 2013, due to an increase in hot mix asphalt sales as a result
of an increase in demand for such materials in connection with ongoing maintenance of roadways and other road
infrastructure projects in Mexico City and the surrounding areas.
Costs from Construction
For the year ended December 31, 2013, our costs from construction were Ps.774.7 million, an increase of
167.8% from Ps.289.3 million during the year ended December 21, 2012. This increase can be attributed to an
GA #100224v5
increase of construction work for the Reforma-Constituyentes and Acopilco exchange-roads as well as the ongoing
construction of the Tlaxcala-Puebla toll road.
Gross Profit
Our gross profit was Ps.3,323.7 million for the year ended December 31, 2013, a 19.0% increase from
Ps.2,792 million for the year ended December 31, 2012. This increase was principally due to (i) a 13.3% increase in
gross profit from our concessions from Ps.2,599.5 million during the year ended December 31, 2012 to Ps.2,945.4
million during the year ended December 31, 2013, (ii) a 21.4% increase in gross profit from our materials for sale
business from Ps.111.6 million during the year ended December 31, 2012 to Ps.135.5 million during the year ended
December 31, 2013, and (iii) a 200.2% increase in gross profit from our construction for engineering works business,
from Ps.80.9 million during the year ended December 31, 2012 to Ps.242.8 million during the year ended December
31, 2013.
The table below sets forth our gross profit and gross margin by business for the periods indicated.
Year ended December 31,
2013
2012
(in thousands of Ps., except percentages)
% of Total
% Change
Gross
from Prior
Gross
% of Total
Gross
Gross Profit
Profit
Period
Margin
Gross Profit Gross Profit
Margin
Concessions ....................................................
2,945,428
88.6%
13.3%
67.0%
2,599,519
93.1%
67.7%
Toll Road Concessions ..........................
2,780,487
83.7%
14.3%
74.1%
2,432,720
87.1%
75.1%
Securitized Toll Roads ....................
1,712,242
51.5%
6.8%
76.3%
1,603,215
57.4%
75.1%
Non-Securitized Toll
Roads(1) ..........................................................
1,068,245
32.1%
28.8%
70.8%
829,505
29.7%
74.9%
Altamira Port Terminal.......................... 164,941
5.0%
(1.1)%
25.7%
166,799
6.0%
27.9%
Materials for sale ............................................ 135,477
4.1%
21.4%
33.0%
111,634
4.0%
29.1%
Construction ................................................... 242,841
7.3%
200.2%
23.9%
80,890
2.9%
21.9%
Total .....................................................
3,323,746
100.0%
19.0%
57.1%
2,792,043
100.0%
60.8%
______________
(1)
Includes gross profit from Opervite, our subsidiary through which we operate our Toll Road Concessions as well as other Infrastructure Projects we
do not own.
Operating Expenses
Our operating expenses for the year ended December 31, 2013 were Ps.37.0 million, an increase of 41.5%
from Ps.26.1 million for the year ended December 31, 2012. This change was due primarily to a general increase in
operating expenses as a part of our normal and ongoing operations.
Other Income
Our other income increased 665.7% from Ps.11.0 million for the year ended December 31, 2012 to Ps.82.9
million for the year ended December 31, 2013. This change was due to an increase of the advisory services rendered
to the operating companies of the Paquete Michoacán.
Net Financing Costs
Our net financing cost for the year ended December 31, 2013 was Ps.947.1 million, a decrease of 2.5% from
Ps.971.5 million for the year ended December 31, 2012. This decrease was primarily the result of lower interest
expense derived from a lower inflation rate in interest rates applicable to our securitization obligations, from 3.819%
for the year ended December 31, 2012 to 3.777% for the year ended December 31, 2013. Given that our securitization
obligations are denominated in UDIs, a decrease in the rate of inflation also decreases the interest rate on such
obligations as well as the peso-value of our debt. On the contrary, an increase in the inflation rate increases amounts
payable by us under our UDI denominated indebtedness.
The following table sets forth a breakdown of our net financing costs for the periods indicated.
GA #100224v5
Year ended December 31,
2013
(in thousands of Ps., except percentages)
% Change from Prior
Period
1,133,544
(6.7)%
(182,189)
(34.4)%
(4,240)
113.6%
947,115
(2.5)%
Interest expense .........................
Interest income ..........................
Exchange rate loss (gain)............
Total.........................................
2012
1,218,142
(277,761)
31,104
971,485
Income Tax Expense
Our income tax expense for the year ended December 31, 2013 increased to Ps.310.9 million, from Ps.17.2
million during the year ended December 31, 2012, due to the fact that in 2012 we amortized the tax losses that had
been reserved, in connection with the revenues generated by the Paquete Puebla toll roads.
Consolidated Net Income
For the reasons set forth above, our consolidated net income for the year ended December 31, 2013 was
Ps.2,189.1 million, a 20.1% increase from the Ps.1,823.3 million for the year ended December 31, 2012.
Basic Earnings per Common Share
Our basic earnings per common share for the year ended December 31, 2013 was Ps.5.76 per share, a 15.0%
increase from Ps.5.01 per share for the year ended December 31, 2012. This increase was due to the increase in our
consolidated net income.
EBITDA
The following table sets forth the EBITDA of the Company per business segment for the years
concluded on December 31, 2014 and December 31, 2013.
Year ended December 31, % of the UAFIDA % of change from
2014
for 2014
2013
(thousands of Ps.)
Concessions:
Year ended December 31,
2013
(thousands of Ps.)
3,604,018
88.01%
8.38%
3,325,252
Securitized Toll Roads
2,002,816
48.91%
8.95%
1,838,341
Non Securitized Toll Roads (1)
1,355,861
33.11%
6.45%
1,273,673
245,341
5.99%
15.06%
213,238
115,474
2.82%
-7.60%
124,973
375,374
9.17%
42.44%
263,529
Altamira Port Terminal
Materials for sale
Construction
Total
4,094,866
100%
10.26%
3,713,754
(1)
Reflects the results of Opervite, our subsidiary through which we operate our Toll Road as well as other Infrastructure Projects we do not own.
The EBITDA of the Company for the year concluded on December 31, 2014 arised to $4,094.9 which
represented an increase of 10.3% regarding the $3,713.8 corresponding to the year concluded on December 31,
2013. This increase was mainly because of an increase in the EBITDA of the construction and concessions sectors
and the materials sector decreased it.
The following table shows the EBITDA of the Company by business segment for the years concluded
on December 31, 2013 and December 31, 2012.
GA #100224v5
Year ended
December 31, 2013
(thousands of Ps.)
3,325,252
1,838,341
1,273,673
213,238
124,973
263,529
3,713,754
% of 2013
UAFIDA
% of change from
2012
Year ended
December 31,
2012
(thousands of Ps.)
2,877,385
1,765,541
906,667
205,177
105,078
99,334
3,081,797
Concessions: ..........................................
89.5%
15.6%
Securitized Toll Roads ........................
49.5%
4.1%
Non-securitized Toll Roads (1) .............
34.3%
40.5%
Altamira Port Terminal .......................
5.7%
3.9%
Materials for Sale ....................................
3.4%
18.9%
Construction ............................................
7.1%
165.3%
100.0%
20.5%
Total .......................................................
______________
(1)
Reflects the results of Opervite, our subsidiary through which we operate our Toll Road as well as other Infrastructure Projects we do not own.
The EBITDA of the Company for the year ended December 31, 2013 was Ps.3,713.8 million, a 20.5%
increase as compared to Ps.3,081.8million for the year ended December 31, 2012. This increase was primarily due
to the Puebla toll road package which operated for only 20 days in 2012 versus a full year in 2013. The EBITDA for
this toll road increased from Ps.23.0 million in 2012 to Ps.265.2 million in 2013. Additionally, the Ecatepec –
Piramides Toll Road increased its EBITDA 18.5% as it grew from Ps.366.4 million in 2012 to Ps.434.2 million in
2013.
Effective Cash Flow Generation for operation activities
Our management uses Effective Cash Flow Generation for operation activities to measure value creation
for the Company. We use this metric to (i) evaluate the wealth generated by us within a given period of time, (ii)
measure the performance of projects, the cash flows from which have not been subject to securitization, (iii) evaluate
the possibility of prepaying our securitizations with cash on hand, (iv) identify the best projects in which to invest,
with the goal of increasing effective cash flow generation. This metric is not necessarily used by other companies
and, as such, is not comparable with other metrics used in the industry to measure the creation of value.
The Company destined $8,994.3 million of cash flow in 2014 to investment activities, compared with the
$2,160.2 millions destined for such purposes on 2013.
This increase is due to the effect of an increase in the investments of securities due to the obtainment of
resources derived from the increase of the corporate capital in June of 2014, through a primary public offering of
registered shares with limited voting rights of the “L” Series. The total amount of the offer is $6,193.4. In that same
regard, the counterpart effect in the field of a premium in shares repositioning can be observed.
Another factor in this variation is that the Company redeemed all of the outstanding amount of the 2009
Mexico-Toluca Issuance from the contracting of new financing in short and long terms and with funds obtained from
the placement of said capital, so that part of the funds were used to pay the securitized loan by $1.396, reducing the
investments balance.
Our cash flows from operating activities for the year ended December 31, 2013 was Ps.3,574.6 million, a
9.7% increase compared to Ps.3,259.1 million for the year ended December 31, 2012. In addition, we used cash flows
in financing activities of Ps.1,391.8 million for the year ended December 31, 2013, compared to Ps.409.1 million for
the year ended December 31, 2012. This includes Ps.1,281.9 million related to the proceeds we received from the
share issuance we made in 2012. As a result, our Effective Cash Flow Generation for the year 2013 was Ps.2,182.8
million, a 39.2% increase compared to Ps.1,568.2 million when excluding the proceeds we received from our share
issuance.
The above is shown in the following table:
As of December 31
2014
Net cash flows provided by
operating activities ...................................
GA #100224v5
4,761,929
2013
(thousands of Ps.)
3,595,366
2012
3,259,112
Net cash flows used in financing
activities....................................................
(2,253,869)
(1,391,847)
(409,057)
Other items: Increase in share
capital at subscription of shares ..............
1,281,853
--—
Effective Cash Flow Generation
for operation activities(1)..........................
2,508,060
2,203,513
1,568,202
(1)
See – “Presentation of Certain Financial Information - EBITDA and Effective Cash Flow Generation for operation activities”
We used Ps. 2,139.5 million of cash flows in investing activities in 2013 compared to Ps. 2,840.5
million in 2012. During the year ended on December 31, 2014, the Company had a free cash flow from operating
activities of $4,761.9 million, 32.5% higher than the $3,595.3 million pesos it had during the year ended on
December 31, 2013. This effect includes an increase of $274.0 of non estimated work supplies, all from Equivent
which are work progress that the Company has for works in Mexico-Toluca (Lerma Stretch 2), Tlaxcala-Puebla,
Tenango-Ixtapan de la Sal (increases in a lane of the road), 365.2 of accrued interests at its charge and issuance costs
recognized in results for the year 2014 of the securitized debts that the Company has of payment of millions of pesos
relating to the payment and a lowering effect of 1,022.6 on the investments in securities with negotiation purposes,
including the decrease in funds in restricted trusts corresponding to the funds held in the Funds Trusted to the Trust
80572 (prepaid account for $250,082.4 and has a reserve account of $409,000.0) were used for the prepayment made
to the Mexico-Toluca toll road debt. Such prepayment was made on August of 2014. And the increase of the major
maintenance reserve in 96.1 by virtue of the recognition of the major maintenance of the Via Atlixcayotl, VirreyesTezihutlan and Apiazaco-Huachinango toll roads.
On the other hand, the use of cash flow for financing activities of $2,253.8 million pesos during the year
ended on December 31, 2014, compared to $1,391.8 million pesos that the Company had during the year ended on
December 31 2013. This increasing effect happened several reasons.
First of all, it is an effect of decrease in loan repayments for $2,547.9 corresponding to the amortization
of the outstanding balance of the 2009 Mexico-Toluca issuance from the hiring of new financing. The outstanding
balance was of $1,224.6 million at an interest rate of 7.95%. The bonds issued under the 2009 Mexico-Toluca
issuance had a maturity date on February 15, 2028. In August of 2014 a refinancing of the debt of the MexicoToluca toll road was carried out, at the same time one coupon for $659 million pesos was prepaid. Therefore, the
decrease observed in the assigned short-term collection rights loan and the interests, are due to the prepayment and
refinancing of such debt. On August 8, a transfer of rights and obligations agreement was celebrated, by means of
which Trust 80572 assigned and Trust 80481 assumed the rights and obligations in their capacity as debtor by the
debt it had contracted as of that date since March 12, 2009, with the Trust 80572 therefore disappearing. On August
15, 2014, PACSA, through Trust 80481, made the restructuring of the credit granted by Banobras whose payment
source consists of the Subordinated Security Certificates. Therefore all of the Security Certificates were prepaid with
proceeds from the extension of the credit with Bancomer and BANOBRAS, in addition to a subordinated credit
granted by PINFRA (eliminated by consolidation). The total balance of the debt on the date of prepayment was
$5,222 million pesos. Due to this financing restructure, the consolidated payable debt decreased in $1,660 million.
Secondly there is an increase of $1,654.5 for credit loans, this is due to the financing contracted with
banking institutions, following the refinancing mentioned in the previous paragraph. Which was contracted with
Banobras for $3,000 million and with BBVA Bancomer for $1,500 million. These credit loans were obtained with
lower rates, decreasing the cost of long-term funding and better credit conditions due to the agreed principal
payments. As part of the obligations of the financial debt of the Company it contracted two Swaps derivatives with
cash flow coverage for interest rates, which has a coverage of 50% of the credit loans according to their proportion.
The Company values these derivatives at market value and because they are coverage instruments their coverage
effects in the capital and their accrued effects of financing costs are recognized.
The debt for bank loans has the following characteristics:
Credit loan amount $4.500 million; Rate: TIIE + SPREAD (in 50% of the amount) & 4.94% +
SPREAD (In another 50% of the amount); The SPREAD applicable is: 1.90% for the first four years, 2.15% over
the next 3 years, 2.40% over the next 3 years and 2.65% from the tenth year.
GA #100224v5
And thirdly, there is a decrease of 664.8 for the payment of issuance costs (commissions, expenses,
costs and fees) relating to the restructuring of credit granted by Banobras and Bancomer.
Liquidity and Capital Resources
General
Historically, our primary sources of liquidity have been (i) cash flows from the operation of our nonsecuritized toll road concessions, (ii) cash flows from our other operations and (iii) proceeds from securitizations of
future toll road collections. During the past several years, our policy has been to incur debt only through our
subsidiaries. To achieve this, a toll road operated by the respective subsidiaries is utilized as source of payment to
guarantee its debt, without using resources that may affect us at a holding level. Therefore, the Company, as a holding
company has no debt nor warranty obligations and therefore the entire debt at the consolidated level represents debt
incurred by its Subsidiaries.
Our main source of financing is the securitization of the cash flows from some of our Toll Road
Concessions. Under the terms of certain of our securitization transactions, all cash flow generated by the operation of
the related toll road in excess of what is required to make payments of scheduled interest and principal must be
applied to make mandatory debt prepayments. However, the net proceeds of our securitizations, after deduction of
transaction costs and required debt service reserves, may be used for general corporate purposes including investing in
other projects or to pay dividends. Thus, until the debt related to a securitization transaction has been repaid in full, we
do not derive any cash flow from toll road collections related to our securitized concessions, other than the
management fees that are paid to us as operator of the related concession.
We may, in the future, consider additional sources of liquidity depending on market conditions. We believe
that our existing sources of liquidity are sufficient to fund our operating expenses and capital expenditure needs in the
foreseeable future.
Securitizations
Restructure, credit extension and modification of the financing of the México-Toluca Toll Road
On September 19, 2003, the Irrevocable Trust Agreement No. F/10250 (Contrato de Fideicomiso
Irrevocable) was executed for the issuance of Preferential Securities (CONSVEN 03-U) and Subordinated Securities
(CONSVEN 03-2U) which was granted by the unilateral declaration of intent of Banco Nacional de Comercio
Exterior, S.N.C. Institución de Banca de Desarrollo (“BANCOMEXT”). The trust agreement was celebrated by
PACSA, as settlor and BANCOMEXT as trustee. The first place beneficiaries are the holders of the Preferential
Securities, in second place MBIA, in third place the holders of the Subordinated Securities, in fourth place the SHCP
and in fifth place PACSA.
The BANCOMEXT Trust 10250 was created to carry out the Issuance of Preferred Securities and
Subordinated Securities, backed by future toll incomes from the Mexico-Toluca Toll Road Concession. The
BANCOMEXT Trust 10250 uses the toll fees, after the payment of the VAT, operation expenses and maintenance of
the toll road and the Trust itself, to employ them in the creation of a new reserve account for the benefit of the holders
of the Securities. Once the Securities are covered, the right of collecting the incomes for the toll road after the
payment of the VAT, operation expenses and road maintenance and the Trust itself during the remaining time of the
concession but until fifteen business days before the term of the concession will belong to the SHCP and to the
Company in accordance to the percentage indicated by the Insurance Company to the trustee, on the sixteenth
business day prior to the term of the concession of the incomes for the toll will be reverted in favor of the Company.
The issuance of the preferred securities counted with an insurance policy granted by MBIA, insurance
company of New York, USA. The insurance policy conferred upon the holders of the Preferred Securities guarantees
repayment of principal and income on each payment date under the terms of such insurance policy. In case of default
of preferred securities and make use of the policy, the insurer had the guarantee of the assets of the Trust, shares that
Grupo Concesionario de México, S.A. de C.V. holds in PACSA and the residual rights of the referred trusts; except
GA #100224v5
for these guarantees, there was no further liability for the Company.
The subordinated securities did not have a guaranty insurance policy as the one referred to in the preceding
paragraph, being their only source of payment of the fees in trust toll roads, so if for any reason such assets were not
enough for the trustee to carry out all payments and comply with the obligations regarding trusts, neither the trustees
nor the Company nor the underwriters nor the depositary, would be responsible.
Notwithstanding what was mentioned in the previous paragraph, the Company considers that the collection
fees in the trust would be sufficient to cover the principal and interest of such subordinated securities.
On April 3, 2006, the Irrevocable Trust Agreement No. 80481(Contrato de Fideicomiso Irrevocable) was
executed by the unilateral declaration of intent of NAFIN (the NAFIN Trust 80481). The Trust agreement was
celebrated by PACSA, as settlor, and NAFIN as trustee. The first place beneficiaries are the holders of the Preferential
Securities, in second place MBIA, in third place the holders of the Subordinated Securities, in fourth place PACSA as
holder of the residual certificate in regards to its right to receive the collection rights.
On April 7, 2006, the refinancing of liabilities related to the Preferential Securities and Subordinated
Securities issued in 2003 through the Bancomext Trust 10250 was carried out; for which the collection rights over the
Mexico-Toluca toll road were transferred to the NAFIN Trust 80481 to which all the assets existing in the Trust
10250 were transferred on such date, including collection rights of the Toll Road, collection rights receivable after
termination, government compensation and any other assets regarding the Mexico-Toluca Toll Road Concession.
The NAFIN Trust 80481 was established for the purpose of carrying out the Issuance of the Preferential
Securities and the Subordinated Securities, backed by future toll incomes from the Mexico-Toluca Toll Road
Concession.
The New Trust 80481 issued preferred securities and subordinated securities denominated in UDI's up to an
amount equivalent to $5'569,959 (value of the original issuance). The New Preferential Securities had a financial
guaranty insurance from MBIA in terms substantially similar to financial guaranty insurance of the original
preferential securities of trust 10250.
The Company assigned to the BANCOMEXT Trust 10250 all of its collection rights, collection rights
receivable after termination, government compensation and any other assets or rights regarding the Mexico-Toluca
Toll Road Concession.
The proceeds from the placement of the new preferential Securities were used, among other things, to settle
the outstanding balance of preferential Securities issued issued by Trust 10250 and the corresponding issuing
expenses. The New Subordinated Securities were exchanged by the subordinated securities issued through the
Original Trust.
On March 19, 2009, a new issuance of subordinated securities series 2009 Padeim 09-U of the MexicoToluca toll road was carried out for an additional amount of 241,538,600 Investments Units (UDI’s), equivalent up to
that date to $1,019,703. This new debt issuance was requested by the Federal Government through BANOBRAS to
finance the additional works requested in the concession title of the toll road and had as purpose: 1) obtain the
subordinated securities owned by the Sistema de Administración y Enajenación de Bienes (SAE) before that new
issuance and which represented 93.54% of the subordinated securities previously issued, and 2) the obtainment of
additional funds for new works.
With the proceeds obtained, the following were paid: a) issuance expenses by $161.018, b) a premium to
replace the SAE for $377.492, and c) other items, mainly value added tax of issuance expenses for $7,148; these
amounts were capitalized under the concept of expenses of issuance of securities, up to the date on which the new
debt issuance was carried out.
The remainder of the loan was deposited in the account the Trust 80481 has with NAFIN, simultaneously
creating a new projects fund amounting to $469.543 that were intended to expand and renovate the Mexico-Toluca
GA #100224v5
toll road and a fund to deal with potential issuance expenses by $4,502. Additionally, the Company will obtain a
release of resources from this trust semiannually until the maturity of the issuance, which come from the deposits for
the collection of vehicle traffic. Such release will depend on a series of variables but whose lower and upper limit will
be 1,489,697 UDI’s and 2,340,953 UDI’s, respectively. This new issuance was in force until February 2030. The trust
agreement was entered into by the Company as the trustor, NAFIN as trustee and BANOBRAS as beneficiary.
The NAFIN Trust 80481 uses the toll fees, after payment of value added tax, income tax, operating expenses
and maintenance of the road and the Trust itself, to be used in the creation of a reserve account for the benefit of the
holders of securities. Once the securities are covered, the right to receive the toll revenues from the road after the
payment of value added tax, income tax, operating expenses and maintenance of the road and the Trust itself during
the time remaining of the concession but until fifteen business days prior to the term of the concession it will belong
to the SHCP and PACSA in accordance to the percentage indicated by MBIA to the trustee, on the sixteenth business
day prior to the term of the concession of the incomes for the toll will be reverted in favor of PACSA.
On the same date the crossing of 93.54% of the total certificates of the Padeim 06-2U Subordinated
Securities possessed by the SAE was made and that the latter called an auction on March 3, 2010 for the sale of those
securities, on March 17, 2010; NAFIN, in its capacity as Trustee under the Irrevocable Trust No. 80572 acquired
Subordinated Securities (Padeim 06-2U). To make the sale of the Padeim 06-2U Subordinated Securities, NAFINSA
in its capacity as Trustee of the Irrevocable Trust No. 80572 obtained a credit with BANOBRAS for 601,912 UDIs
($2,541,089).
The maturity of this new issuance was set for February 15, 2030 and it generated a variable interest rate.
The debt of Padeim 09U Subordinated Securities was guaranteed just as the debt of the Padeim 06-2U
Subordinated Securities with the future toll of vehicle traffic that transited on the Mexico-Toluca toll road, operated
by the Company. The contracting of the Padeim 09U Subordinated Securities was supported with projections of the
capacity that justify their purchase.
The debt of these notes was guaranteed with the future toll of vehicle traffic in transit on the Mexico-Toluca
toll road operated by PACSA, until the end of the concession period, which will be in February of 2030.
On August 8, 2014, NAFIN as trustee of the irrevocable trust number 80481, PACSA, BANOBRAS and
BBVA Bancomer entered into the Restructuring, Credit Extension and Full Amendment Agreement (“Restructuring
Agreement”) for an amount of $4,500,000 to settle BANOBRAS for a principal which shall not exceed the amount
specified by $3,000,000 and Bancomer which granted a simple credit loan for $1,500,000 payable in quarterly
installments, and interest to a TIIE plus a variable Spread previously agreed from 1.90% to 2.65% to be payable
quarterly.
On August 15, 2014, the Company carried out the restructuring of PADEIM 06U, PADEIM 06-2U and
PADEIM 09U Security Certificates (collectively the “CB's”) backed by the collection rights of the Mexico-Toluca
Toll Road, Constituyentes and Reforma-La Venta Stretch. The total of the Preferential and Subordinated Securities
prepaid on that date, considering the available resources within the Trust, which are integrated as follows:
As of August 15, 2014
Number of
UDI’s
PADEIM 06-U Preferential Securities (Matured on
February 15, 2028)
PADEIM 06-2U Subordinated Securities (Matured on
February 15, 2030)
PADEIM 09-U Subordinated Securities (Matured on
February 15, 2030)
Total payable securities
Funds in short term investment bonds prepayment
subaccount of PADEIM 06-U preferential securities
Funds restricted in bonds investments
GA #100224v5
567,907,640
Value of the UDI
$
5.147888
Amount
(Thousands of
Ps.)
$
2,923,525
337,181,493
5.147888
1,735,773
237,363,248
1,142,452,381
5.147888
5.147888
1,221,919
5,881,217
(250,083)
(409,000)
$
5,222,134
For the fulfillment of the obligations and acceptance of the abovementioned prepayment, on August 8, 2014,
the following agreements were celebrated:
1. NAFINSA in its capacity as trustee of Trust No. 80572, assigns all of its rights and obligations to the
NAFIN Trust No. 80481 and the latter assumes the payment obligations of the principal, interests and other
accessories of the subordinated simple credit loan dated March 12, 2009 (“Original Credit”), fully recognizing that the
principal balance of the simple credit loan as of the date of the Assignment Agreement owed to BANOBRAS is of
558'130,767 UDIs.
2. On August 8, 2014, NAFIN as trustee of the irrevocable trust number 80481, PACSA, BANOBRAS and
BBVA Bancomer celebrated the Restructuring Agreement for an amount of $4,500,000 to settle BANOBRAS for a
principal which shall not exceed the amount specified by $3,000,000 and Bancomer which granted a simple credit
loan for $1,500,000 payable in quarterly installments, and interest to a TIIE plus a variable Spread previously agreed
from 1.90% to 2.65% to be payable quarterly. The source of payment is constituted by the receivables of MexicoToluca toll road and Constituyentes and Reforma-La Venta Stretch.
The Restructuring Agreement acknowledges that the balance of the Original Credit owed to BANOBRAS to
that date is 558'130,767 UDI’s and it agree to pay 5'381,662 UDI’s to its equivalent in pesos along with the interests
accrued by August 15, 2014, corresponding the repayment scheduled for such period. Once such payment is made,
the outstanding balance of the subordinated credit loan is of 552'749,105 UDI’s. PACSA and BANOBRAS agree that
such balance is restructured by its equivalent in pesos at August 15, 2014 and that amount will be part of the
outstanding loan balance established in the Restructuring Agreement.
Also in the Restructuring Agreement, creditors independently agree, to grant an extension of the credit
granted in an amount of $1.65451 million (“Extension”). The main destination of resources for the Extension are (i)
the prepayment of the Preferential Securities (PADEIM 06U) and (ii) the payment of commissions and other
expenses related to the Restructuring Agreement.
As part of the obligations under the Restructuring Agreement, the Company subscribed on August 8, 2014 a
contract for derivative financial instruments that manages its exposure to interest rate volatility risk. Such coverage
provides for an initial notional amount equivalent to 50% of the amount granted under the Restructuring Agreement
with a term of five years.
PACSA made the refinancing of its debt by celebrating the Restructuring Agreement through BANOBRAS
and BBVA Bancomer, for a total of $4'500,000 (original historical cost).
(1) Preferred Syndicated Loan with BANOBRAS for a total of $3,000,000 (original historical cost).
(2) Preferred Syndicated Loan with BBVA Bancomerfor a total of $1,500,000 (original historical cost).
(3) Primarily consists of commission payments for refinancing that were paid to BANOBRAS for $559,048,
financial advisory Tecsar, S.C. for $61.950 and a restructuring commission to BBVA Bancomer for $34,200, these
issuance expenses were accounted of the financial debt on that date, the amortization of the period of issuance
expenses amounted to $27,723.
2015
2016
2017
2018
Posterior
GA #100224v5
$
286,242
22,500
54,000
58,500
3,887,799
$
4,309,041
During the term of the bank credit loans, PACSA must comply certain conditions, the most important being
the following:
a.
Comply with all legal requirements to which it is bound as a legal entity and derived from its
normal activities.
b.
Pay on the corresponding date, under applicable law, the taxes, duties, social security
contributions and government charges.
c.
Obtain and maintain in effect the insurance policies in relation to the assets of the project, for the
amounts required under its concession title.
d.
Meet the coverage index of the debt service whose calculation is established in the
Restructuring Agreement.
e.
Keep the debt reserve established by the Restructuring Agreement.
f.
Contract and maintain the interest rate coverage from August 19, 2014.
g.
PACSA may not incur in any additional debt.
By December 31, 2014 the conditions had been fulfilled by PACSA.
As of December 31, 2014, PACSA had assets for an amount equivalent to Ps.4,717 million and a negative equity
which amounted to Ps.2,085 million. Likewise, in the fiscal year of 2014 it reported a loss for Ps.143 million and total
sales equivalent to Ps.1,436 million.
Peñón-Texcoco Toll Road Securitization
On December 17, 2004, our subsidiary CPAC, as settlor, Inbursa, as trustee, and Casa de Bolsa Arka, S.A. de
C.V. as agent of the noteholders (“ARKA”), entered into the irrevocable trust agreement (Contrato de Fideicomiso
Irrevocable) to establish a program for the issuance of securities (certificados bursátiles fiduciarios) in an aggregate
principal amount of Ps.1,850 million (the “Peñón-Texcoco Issuance Trust”) for the refinancing of the toll road. All
collection rights derived from the payment of tolls under the Peñón-Texcoco Toll Road Concession were assigned to
the Peñón-Texcoco Issuance Trust to repay the debt under the program.
Pursuant to the terms and the waterfall established in the Peñón-Texcoco Issuance Trust agreement, the
proceeds from the operation of the Peñón-Texcoco Toll Road Concession shall be distributed in the following order:
(i) to pay the VAT derived from the collection of the toll rates; (ii) to pay the consideration corresponding to the
Mexican Federal Government and to the Government of the State of Mexico equal to 1.0% and 0.5%, respectively, of
the annual gross toll income (excluding VAT) of the Peñón-Texcoco toll road; (iii) to cover the applicable operation
and minor maintenance expenses pursuant to the operation and minor maintenance budget prepared under the terms
of the Peñón-Texcoco Issuance Trust agreement; (iv) to maintain a reserve in connection with the payment of major
maintenance expenses, which shall be equal to six months of the annual budget established under the Major
Maintenance Program prepared pursuant to the Peñón-Texcoco Issuance Trust agreement, and for paying related
expenses; (v) to cover any expenses related to the maintenance of the 2004 Peñón-Texcoco Issuance reserve; (vi) to
pay scheduled principal and accrued interest on the securities on the applicable biannual payment date; (vii) to
maintain a reserve fund in connection with the scheduled payment of principal and accrued interest on the securities
on the applicable biannual payment date, which shall be equal to two times the amount of interest payable during the
beginning of the relevant quarter plus the two succeeding payments of principal, which shall be used whenever the
proceeds from the operation of the Peñón-Texcoco Toll Road Concession during the corresponding quarter are not
sufficient for such purposes; and (viii) any remaining amounts on the corresponding biannual payment date shall be
used to prepay principal of the securities.
On December 23, 2004, the Peñón-Texcoco Issuance Trust issued, under the terms of the authorized
GA #100224v5
program, 18’500,000 securities trading under the symbol “CPACCB 04,” in an aggregate principal amount of
Ps.1,850 million (the “2004 Peñón-Texcoco Issuance”). The proceeds from the issuance of the securities under the
2004 Peñón-Texcoco Issuance were principally used for working capital purposes, to establish the reserve fund and
Ps.581.0 million were used to repay in full the amounts owed under securities (certificados de participación ordinaria
or CPOs), issued for the refinancing of the toll road through an irrevocable management trust agreement dated August
9, 1994 by and between CPAC, and Banco Interacciones, S.A., Institución de Banca Múltiple, Grupo Financiero
Interacciones, acting as trustee.
The securities under the 2004 Peñón-Texcoco Issuance must be prepaid on each biannual payment date with
the remaining proceeds once the concepts listed above are paid, without any obligation to pay any prepayment
penalties or premiums to the noteholders. The 2004 Peñón-Texcoco Issuance does not allow voluntary prepayments
of the securities.
CPAC, the trustee or ARKA, shall not be liable for the payment of amounts owed under the securities issued
pursuant to the 2004 Peñón-Texcoco Issuance, which shall only be payable the Peñón-Texcoco Issuance Trust estate.
The securities issued under the 2004 Peñón-Texcoco Issuance yield interest at an annual rate of TIIE + 2.95
and mature on December 2, 2021. The 2004 Peñón-Texcoco Issuance also provides the application of penalty interest
at a rate of 1.5 times the ordinary rate. The total outstanding amount of these securities as of December 31, 2014 was
Ps.836.9 million. As of December 31, 2014, the Peñón-Texcoco Issuance Trust maintained a reserve in the amount of
Ps.303.8 million to service any payment obligations thereunder.
As of December 31, 2014, the total assets of CPAC were Ps.4,791.5 million and equity of Ps.658.0 million.
For the year ended 2014, CPAC reported losses of Ps.158.9 million and total sales of Ps.2,075.4 million.
Tenango-Ixtapan de la Sal Toll Road Securitization
On October 3, 2005, Autopista Tenango-Ixtapan de la Sal, S.A. de C.V. and Pinfra Sector Construcción,
S.A. de C.V. entered into an amendment agreement to the Trust agreement 11027448 and an Irrevocable
Management and Source of Pay Trust with Scotiabank Inverlat, S.A., Institución de Banca Múltiple, Grupo
Financiero Scotiabank Inverlat, División Fiduciaria, through the transfer to the Trustee of the collection rights, as well
as all fees present or future that it may have the right to collect or receive in regards with the toll road, the
indemnization rights and all other assets of the original trust, with the purpose of making a placement of unsecured
certificates that by nature do not have any guaranty.
The issuance had a reserve fund in which there were resources equivalent to a year of service of the debt
(principal and interests) for the adequate control of the assters of the trust, and it remained in effect for the same time
the trust did.
On December 11, 2013, ATISA and Pinseco, as settlors, established a trust with Banco Invex, S.A. ,
Institución de Banca Multiple, Invex Grupo Financier, for the issuance of securities (certificados bursátiles
fiduciarios) for an aggregate principal amount of 158,057,900 UDIs All collection rights derived from the payment of
tolls under the Tenango-Ixtapan de la Sal Toll Road Concession were assigned to the Tenango-Ixtapan de la Sal
Issuance Trust to repay the debt thereunder. The securities are not guaranteed.
On February 17, 2014, the Tenango-Ixtapan de la Sal Issuance Trust issued, 1,580,579 preferred securities in
an aggregate principal amount of 158,057,900 UDIs (equivalent to Ps.809,999,636.25) (the “Tenango-Ixtapan de la
Sal Issuance”). The preferred securities will accrue interest at 5% annual fixed interest rate. These securities are
subject to total or partial voluntary redemption, subject to the payment of an early redemption premium. They are also
subject to mandatory redemption in case of an event of default under the securities.
Pursuant to the terms and the waterfall established in the Tenango-Ixtapan de la Sal Issuance Trust
agreement, the proceeds from the operation of the Tenango-Ixtapan de la Sal Toll Road Concession shall be
distributed in the following order: (i) to pay the VAT derived from the collection of the toll rates; (ii) to pay the
consideration corresponding to the Government of the State of Mexico equal to 1.5% of the monthly gross toll
GA #100224v5
income (excluding VAT) of the Tenango-Ixtapan de la Sal toll road; (iii) to cover the applicable operation and major
maintenance expenses pursuant to the Operation and Major Maintenance Budget prepared under the terms of the
Tenango-Ixtapan de la Sal Issuance Trust agreement; (iv) to maintain a reserve in connection with the payment of
major maintenance expenses, pursuant to the Tenango-Ixtapan de la Sal Issuance Trust agreement, and for paying
related expenses; (v) to cover the applicable operation and minor maintenance expenses pursuant to the Operation and
Minor Maintenance Budget prepared under the terms of the Tenango-Ixtapan de la Sal Issuance Trust agreement; (vi)
to pay scheduled principal and accrued interest on the applicable payment date. Atisa, Pinseco the trustee or Invex,
shall not be liable for the payment of amounts owed under the securities issued pursuant to the 2005 Tenango-Ixtapan
de la Sal Issuance, which shall only be payable with the Tenango-Ixtapan de la Sal Issuance Trust estate.
The securities issued under the Tenango-Ixtapan de la Sal Issuance mature on December 1, 2034 and are
listed as “TENIXCB 14U”. As of December 31, 2014, the total outstanding amount of these securities was Ps.790.6
million.
As of December 31, 2014, the total assets of ATISA were Ps.927.8 million and negative equity of Ps.183.3
million. For the year ended 2014, ATISA reported a loss of Ps.21.1 million and total sales of Ps.148.4 million.
Santa Ana-Altar Toll Road Securitization
On August 30, 2006, our subsidiary Zonalta, as settlor and Banco Inbursa, S.A. Institución de Banca
Múltiple, Grupo Financiero Inbursa (“Inbursa”), as trustee, entered into the Irrevocable Management and Source of
Payment Trust Agreement (Contrato de Fideicomiso Irrevocable de Administración y Fuente de Pago), to establish a
program for the issuance of securities (certificados bursátiles fiduciarios) in an authorized aggregate principal amount
of Ps.1,600 million (the “Santa Ana-Altar Issuance Trust”). All collection rights deriving from the payment of tolls
under the Santa Ana-Altar Toll Road Concession were assigned to the Santa Ana-Altar Issuance Trust to repay the
debt under the program.
On December 14, 2006, the Santa Ana-Altar Issuance Trust issued, under the terms of the authorized
program, 4,235,329 securities trading under the symbol “ZONALCB 06U,” in an aggregate principal amount of
423.5 million UDIs (the “2006 Santa Ana-Altar Issuance”). The proceeds from the issuance of the securities under
the 2006 Santa Ana-Altar Issuance were principally used for working capital purposes and to establish the reserve for
the repayment of debt.
Pursuant to the terms and the waterfall established in the Santa Ana-Altar Issuance Trust agreement, the
proceeds from the operation of the Santa Ana-Altar Toll Road Concession shall be distributed in the following order:
(i) to pay the VAT derived from the collection of the toll rates; (ii) to pay the consideration corresponding to the
Government of the State of Sonora equal to 2.5% of the monthly gross toll income (excluding VAT) of the Santa
Ana-Altar toll road; (iii) to cover the applicable operation and minor maintenance expenses pursuant to the Operation
and Minor Maintenance Budget prepared under the terms of the Santa Ana-Altar Issuance Trust agreement; (iv) to
maintain a reserve fund in connection with the payment of major maintenance expenses, which shall be equal to 50%
of the greater of the annual budget established under the Major Maintenance Program for the current year and the
annual budget established for the next year, and for paying related expenses; (v) to cover any expenses related to the
maintenance of the 2006 Santa Ana-Altar Issuance; (vi) to pay accrued interest on the securities on the applicable
biannual payment date; (vii) to maintain a reserve fund in connection with the scheduled payment of principal and
accrued interest on the securities on the applicable biannual payment date which shall be equal to the interest payable
on the next three succeeding payment dates; and (viii) any remaining amounts on the corresponding biannual
payment date shall be used to prepay principal of the securities.
The 2006 Santa Ana-Altar Issuance initially provided two types of prepayments, mandatory and voluntary.
The securities under the 2006 Santa Ana-Altar Issuance must be prepaid on each payment date with the remaining
proceeds once the items listed above are paid with, in certain cases, an obligation to pay prepayment penalties to the
noteholders if the amount prepaid is higher than the one established in the trust agreement. In addition, the securities
under the 2006 Santa Ana-Altar Issuance may be voluntarily prepaid at any time, with an obligation to pay
prepayment penalties to the noteholders if the amount prepaid is greater than the one established in the trust
agreement.
GA #100224v5
Partial prepayment of the Zonalta Certificates
On June 11, 2012, the general holders meeting of the Zonalta Certificates approved the partial prepayment of
the (ZonalCB 06U) certificates issued under the Santa Ana-Altar Issuance Trust. In addition to partial prepayment of
Ps.389.9 million the holders approved a Ps.10.1 million contribution for major maintenance and tendering their
certificates in exchange for a new series of certificates.
In compliance with the resolutions adopted in the General Holders Meeting of the Trust Securities ZonalCB
06U, on June 19 of 2012, the Technical Committee of the Issuing Trust for the Santa Ana-Altar Toll Road signed the
amendment agreement to Trust No. F/1486, previously authorized by the SCT. In that agreement the exchange of the
ZonalCB 06U Certificates was instrumented, dividing the debt in three series with different characteristics. The
exchange of the Securities was as follows, under the Series 06U, Series 06-2U and Series 06-3U series, respectively:

A preferential series (“ZONALCB 06U”) for an amount equivalent to 50% of the debt, equivalent
to 211,739,500 UDIs. These securities have a maturity date on December 14, 2033 and a real
interest rate of 5.40%, gradually increasing up to 5.60%, if these certificates are not completely
liquidates as of December 14, 2031. The principal will be paid by the term although there is an
option of anticipated semiannual payments. Interests will be paid semiannualy.

A subordinated series (“ZONALCB 06-2U”) for an amount equivalent to 20%, equivalent to
84,695,800 UDIs. These securities have a real interest rate of 5.40% until December 14, 2031; after
such date the interest rate will be gradually increasing up to 5.60% until the liquidation of the debt,
which maturity date is December 14, 2034. Once the preferential series have been paid in full and if
there is a remnant of resources, it will be paid anticipately, up until the the subordinated series may
amount to. The principal of these securities will be paid by the term although there is an option of
anticipated payments. Interests will be paid semiannualy, in case of having enough resources.

A subordinated series (“ZONALCB 06-3U”) for an amount equivalent to 30% of the debt,
equivalent to 127,043,700 UDIs. These securities have a real interest rate of 5.40% until December
4, 2031; after such date the interest rate will be gradually increasing up to 5.60% until the
liquidation of the debt. Each time the accumulated prepayments of the Preferential Series arise to
5% of the initial amount of the same, 8% of the convertible series will transform into preferential
series.
The Company determined that the terms of the new certificates were not substantially different, and
therefore, the modification was not accounted for as a debt extinction. This exchange did not generate or require any
cash flows.
The total outstanding amount of the “ZONALCB 06U”, “ZONALCB 06-2U”, and “ZONALCB 06-3U”
securities as of December 31, 2014 was Ps.1,650.9 million, and the amount of reserve to cover the service of the debt
represented by the same arised to Ps.74.6 million.
As of December 31, 2014, the total assets of Zonalta were Ps.1,834.0 million and a negative equity of
Ps.423.4. For that same period, Zonalta reported a loss of Ps.34.3 million and total sales of Ps.184.3 million.
Atlixco-Jantetelco Toll Road Securitization
On September 15, 2006, our subsidiary CONCEMEX (with respect to the Atlixco-San Bartolo-Cohuecán
Stretch) and RCA (with respect to the Morelos Stretch), as settlors, Banco Invex, S.A., Institución de Banca Múltiple,
Invex Grupo Financiero, Fiduciario, as trustee, and Monex, as agent of the noteholders, executed the irrevocable
management and source of payment trust agreement (Contrato de Fideicomiso Irrevocable de Administración y
Fuente de Pago), to establish a program for the issuance of securities (certificados bursátiles fiduciarios) in an
aggregate principal amount of Ps.660.0 million (the “Atlixco-Jantetelco Issuance Trust”). The debt thereunder is to be
allocated as follows: 85.0% of the total debt is held by CONCEMEX, while the remaining 15.0% is held by RCA. All
collection rights derived from the payment of tolls under the Atlixco-Jantetelco Stretch and under the Morelos Stretch
GA #100224v5
were assigned to the Atlixco-Jantetelco Issuance Trust to repay the debt under the program.
On September 15, 2006, the Atlixco-Jantetelco Issuance Trust issued, under the terms of the authorized
program, 1,438,418 securities trading under the symbol “CONCECB 06U,” in an aggregate principal amount of
143.8 million UDIs (the “2006 Atlixco-Jantetelco Issuance”). The proceeds from the issuance of the securities under
the 2006 Atlixco-Jantetelco Issuance were used, among others, for working capital purposes and to pay certain
investment made by the Government of the State of Puebla for the repair and construction of the Atlixco-San BartoloCohuecán Stretch.
Pursuant to the terms and the waterfall established in the Atlixco-Jantetelco Issuance Trust agreement, the
proceeds from the operation of the Atlixco-Jantetelco Toll Road Concession shall be distributed in the following
order: (i) to pay the VAT derived from the collection of the toll rates with respect to each of the Atlixco-San BartoloCohuecán Stretch and the Morelos Stretch; (ii) to pay (a) the consideration corresponding to the Government of the
State of Puebla equal to 1.0% of the biannual gross toll income (excluding VAT) of the Atlixco-San BartoloCohuecán Stretch, and (b) the consideration corresponding to the Government of the State of Morelos equal to 6% of
the monthly gross toll income (excluding VAT) of the Morelos Stretch; (iii) to cover the applicable operation and
minor maintenance expenses pursuant to the operation and minor maintenance budget prepared under the terms of the
Atlixco-Jantetelco Issuance Trust agreement; (iv) to maintain a reserve in connection with the payment of major
maintenance expenses in an amount of Ps.451,197, which can only be used, prior authorization of the Government of
the State of Puebla, to pay major maintenance expenses related to the Atlixco-San Bartolo-Cohuecán Stretch; (v) to
pay any expenses related to the maintenance of the 2006 Atlixco-Jantetelco Issuance; (vi) to pay accrued interest on
the applicable biannual payment date; (vii) to maintain a reserve fund in connection with the scheduled payment of
interest which shall be equal to the interest payable on the succeeding two payment dates; (viii) once certain operating
thresholds are met (9,100 ADTV), to pay 50% of the revenues derived from the operation of the Morelos Stretch to
the Government of the State of Morelos; and (ix) any remaining amounts on the corresponding biannual payment date
shall be used to prepay principal of the securities.
The 2006 Atlixco-Jantetelco Issuance provides two types of prepayments, mandatory and voluntary. The
securities under the 2006 Atlixco-Jantetelco Issuance must be prepaid on each payment date with the remaining
proceeds once the items listed above are paid, with, in certain cases, the obligation to pay prepayment penalties to the
noteholders if the amount prepaid is greater than the one established in the trust agreement. In addition, the securities
under the 2006 Atlixco-Jantetelco Issuance may be voluntarily prepaid at any time, with an obligation, in certain
events, to pay prepayment penalties to the noteholders if the prepaid amount is greater than the one established in the
trust agreement. Additionally, in the event the proceeds generated from the operation of the Atlixco-Jantetelco toll
road are not sufficient to timely pay principal and accrued interest on the securities, RCA and CONCEMEX will be
entitled to request a two-year extension of the term of the concession to pay the securities. In the event an extension to
the term of the concession is granted, only the proceeds from the operation of the Atlixco-San Bartolo-Cohuecán
Stretch will continue being assigned to the trust estate.
CONCEMEX, RCA, the trustee or Monex, shall not be liable for the payment of amounts owed under the
securities issued pursuant to the 2006 Atlixco-Jantetelco Issuance, which shall only be payable with the AtlixcoJantetelco Issuance Trust estate.
The securities issued under the 2006 Atlixco-Jantetelco Issuance yield interest at an annual rate of 5.83% and
mature on September 4, 2026. The total outstanding amount of these securities as of December 31, 2014 was Ps.191.1
million.
CONCEMEX merged with CPAC on December 31, 2013, however the process has not been completed.
As of December 31, 2014, the total assets of CPAC were Ps.4,791.5 million and equity of Ps.658.0 million.
For the year ended 2014, CPAC reported losses of Ps.158.9 million and total sales of Ps.2,075.4 million.
As of December 31, 2014, the total assets of RCA were Ps.53.2 million and a negative equity of Ps.25.1
million. For the year ended 2014, CPAC reported a profit of Ps.4.9 million and total sales of Ps.23.6 million.
GA #100224v5
Capital Expenditures
The following table sets forth a breakdown of our principal capital expenditures by business line for the
periods indicated.
For the year ended December 31,
2014
2013
2012
(in thousands of Ps.)
Capital Expenditures
Concessions ...........................................................................
Land and equipment for production of materials for sale ..........
Construction ..........................................................................
Total......................................................................................
170,526
17,298
1,203
189,027
36,095
1,448
33,365
70,908
21,554
1,999
32,412
55,965
Aggregate capital spending increased approximately 166.6% in 2014 as compared to 2013. The increase in
aggregate capital spending in 2014 was primarily due to an increase of 372.4%% in spending related to our
concessions and materials business due to the purchase of equipment in 2014 used in operating and maintaining the
roads and in the plants due to an investment in shredding equipment, likewise but to a lesser extent, due to a
decrease in investment related to the construction business.
Capital Investment
Through IPM, we plan to increase our capacity and service with the acquisition an additional ship-to-shore
crane as well as four new gantry cranes (RTG) for the Altamira Port. The purchase of these cranes is expected to
occur at the end of 2015, to be delivered and become operational in 2016, which is the time we estimate more PostPanamax ships will be arriving to the Altamira Port. We estimate that the required investment will be around
U.S.$14 million, however the related negotiations have not concluded and, as such, we are unable to exactly
determine the actual cost, financing or completion dates of this project.
In addition, we will need to invest, through GCI, in modernizing our asphalt plant over the next year in
order to optimize production and lower our cost per ton. Although negotiations have not started, we estimate to
invest approximately U.S.$6.0 million to implement our modernization plans. The exact timeline and financing
structure for this project is yet to be determined and in the meantime we could consider other options, such as
moving the plant to another location to better serve other locations.
Lastly, we will allocate resources to build the toll roads we have already been awarded and which
concession titles we have already signed. For the Peñón-Ecatepec toll road we will allocate approximately Ps.1,500
million during 2015 and 2016. We will need to allocate approximately Ps.225 million to the Tlaxcala-Puebla toll
road, which construction works concluded in 2014. Finally, we have estimated an investment of Ps.3,290 million to
build the Marquesa-Lerma Stretch between 2015 and 2016.
Contractual Obligations
Our long-term debt obligations consist of payment obligations under our securitization transactions. In
accordance with the terms of our concessions, we are required to make certain expenditures, including in the form of
construction, once certain events, such as when Average Daily Traffic by Vehicle Equivalents during a given period
surpasses that established under the terms of the related concession. As such expenditures are contingent on the
occurrence of certain events, we are unable to determine the amount of, or when we will be required to make, such
capital expenditures.
The following table sets forth a breakdown of our long-term contractual obligations as of December 31,
2014:
GA #100224v5
PAYMENTS DUE BY PERIOD
PLACEMENT
COMPANY
DEBT
1-3
3-5
MORE THAN
LESS THAN
ONE YEAR
YEARS
YEARS
5 YEARS
10,554,192
350,012
591,926
666,065
8,946,188
TOTAL
MÉXICO - TOLUCA
PACSA
PEÑÓN - TEXCOCO
CPAC
1,052,905
180,417
388,169
426,812
57,506
TENANGO - IXTAPAN DE
LA SAL
ATISA &
PINSECO
2,372,942
43,472
93,396
109,481
2,126,593
ATLIXCO - JANTETELCO
CONCEMEX
243,140
53,653
101,648
87,839
SANTA ANA - ALTAR
PREFERENTIAL
ZONALTA
1,906,670
81,236
SANTA ANA - ALTAR
SUBORDINATED
ZONALTA
1,132,488
21,718
SANTA ANA - ALTAR
CONVERTIBLE
ZONALTA
2,449,288
34,699
19,711,625
765,207
LONG TERM DEBT
OTHER CONTRACTUAL
OBLIGATION
TOTAL
19,711,625
169,304
47,581
73,716
1,465,740
765,207
-
1,465,740
-
188,024
1,468,106
54,552
1,008,637
79,625
2,261,248
1,612,400
15,868,279
1,612,400
15,868,279
______________
(1)
These are estimates as some of the securitizations are denominated in UDIs. Accordingly, the amounts hereon represent the peso equivalent
of the projected payments in UDIs. We estimated the exchange rate of UDIs to pesos based on the exchange rate as of December 31, 2014,
assuming it increases each year by an inflation rate of 4%. Additionally, the amounts hereon include projected interest payme nts. As some of
our securitization obligations incur interest at the TIIE, we estimated the future interest payable based on the TIIE as of December31, 2014.
(2)
These amounts represent (i) our financial leasing obligations and (ii) our obligations with respect to major maintenance on the highways we
operate. Our concession agreements require us to maintain the highways under concession in optimal working condition, for which reason
we are required to carry out routine maintenance. Amounts herein represent amounts accrued in our unaudited condensed consolidated
interim financial statements as of December 31, 2014. Future maintenance expenditures above that which we have accrued as of December
31, 2014 are dependent on the occurrence of events (mainly deterioration of the highway from use by vehicles) and are thus not included in
this table given their contingent nature.
Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risks arising from our normal business activities. These market risks principally
involve the possibility that changes in exchange rates between UDIs and pesos will adversely affect the value of our
financial assets and liabilities or future cash flows and earnings. Market risk is the potential loss arising from adverse
changes in market rates and prices. UDI is a conversion factor to take into account inflationary effects. As of
December 31, 2014, 35.1% of our indebtedness, mainly our securitizations, was denominated in UDIs. This risk is
partially mitigated because the revenues earned under the concessions which are subject to securitization transactions
are subject to inflationary adjustments on a yearly basis.
Additionally, we are exposed to market risk due to interest rate fluctuations in the TIIE. An increase in the
TIIE will defer payment of principal, as cash designated for debt service will be used to pay accrued interest prior to
paying down principal, increasing our cost of capital. Interest rate risk exists with respect to our securitization
transactions with variable interest rates tied to the TIIE.
The following table sets forth the exposure of our long-term debt to interest rate and exchange rate
fluctuations as of December 31, 2014:
GA #100224v5
FINANCING COST
PLACEMENT
COMPANY
TIIE
TIIE
UDI
UDI
PACSA
+1.00%
133,979,788
-1.00%
97,420,531
+1.00%
-
-1.00%
-
MÉXICO - TOLUCA
PEÑÓN - TEXCOCO
TENANGO - IXTAPAN DE LA
SAL
ATLIXCO - JANTETELCO
CPAC
67,642,708
50,445,636
-
-
ATISA Y
PINSECO
CONCEMEX
-
-
81,331,767
64,325,527
-
-
24,769,250
19,888,134
ZONALTA
-
-
87,272,054
69,675,187
ZONALTA
-
-
37,772,039
30,155,976
ZONALTA
-
-
64,883,919
51,801,224
201,622,496
147,866,167
296,029,030
235,846,048
28.00%
28.00%
28.00%
28.00%
145,168,197
106,463,640
213,140,902
169,809,155
SANTA ANA - ALTAR
PREFERENTIAL
SANTA ANA - ALTAR
SUBORDINATED
SANTA ANA - ALTAR
CONVERTIBLE
TOTAL
INCOME TAX RATE
SENSITIVITY
FINANCING COST
PLACEMENT
MÉXICO – TOLUCA
PEÑÓN – TEXCOCO
COMPANY
TIIE
+1.00%
133,979,788
67,642,708
TIIE
-1.00%
UDI
-1.00%
TENANGO - IXTAPAN DE LA SAL
PACSA
CPAC
ATISA Y
PINSECO
-
-
81,331,767
64,325,527
ATLIXCO – JANTETELCO
SANTA ANA - ALTAR PREFERENTIAL
CONCEMEX
ZONALTA
-
-
24,769,250
87,272,054
19,888,134
69,675,187
SANTA ANA - ALTAR SUBORDINATED
SANTA ANA - ALTAR CONVERTIBLE
ZONALTA
ZONALTA
-
-
37,772,039
64,883,919
30,155,976
51,801,224
147,866,167
28.00%
296,029,030
28.00%
235,846,048
28.00%
106,463,640
213,140,902
169,809,155
TOTAL
INCOME TAX RATE
201,622,496
28.00%
SENSITIVITY
145,168,197
97,420,531
50,445,636
UDI
+1.00%
Off-Balance Sheet Arrangements
Our Company does not have any off-balance sheet arrangements.
GA #100224v5
-
-
IV.
1)
MANAGEMENT
BOARD OF DIRECTORS
Our board of directors currently consists of eight members and is responsible for the management of our
business. Each director is appointed for a term of one year and may be re-elected for the same position. The members
of the board of directors are elected by our shareholders. Our board of directors meets at least once quarterly. Pursuant
to Mexican law, at least 25% of the members of the board of directors must be “independent,” as such term is defined
by the LMV. Our bylaws provide for an alternate director to serve in place of an elected director if such director is
unable to attend a meeting of the board of directors. Our bylaws also establish that any shareholder or group of
shareholders representing at least 10% of the total share capital of the Company (including limited voting shares as in
the case of Series L Shares) shall be entitled to appoint and dismiss a director and its respective alternate.
Except for Mr. David Peñaloza Alanís, who was appointed as Chairman of the Board on April 30, 2013, the
current members of our board of directors were nominated and elected to such position at our annual shareholders
general meeting held on March 8, 2013.
Set forth below are the names of our current directors, positions, ages, their years of service as directors, and
the expiration of their term.
Age
42
Years as Director
3
Expiration of
Term
April 30, 2015
Director
44
7
April 30, 2015
Mr. Moisés Rubén Kolteniuk Toyber
Director
69
10
April 30, 2015
Mr. Carlos Césarman Kolteniuk
Director
52
10
April 30, 2015
Mr. Luis Javier Solloa Hernández
Independent Director
48
7
April 30, 2015
Mr. Luis Hoyo García
Independent Director
42
7
April 30, 2015
Mr. Ramiro Pérez Abuin
Independent Director
37
7
April 30, 2015
Mr. Frantz Joseph Guns Devos
Independent Director
61
10
April 30, 2015
Name
Mr. David Peñaloza Alanís
Position
Chairman of the Board
Mrs. Adriana Graciela Peñaloza Alanís
The secretary of the board of directors is Mr. Jesús Enrique Garza Valdés.
The following biographies provide certain information about our directors:
David Peñaloza Alanís. Mr. Peñaloza Alanís is currently the Chairman of the Board of Directors of Pinfra
and the Chief Executive Officer of Pinfra. Previously, he worked at Société Générale, GBM and Serfin. He holds an
Accounting Degree from the Universidad Anáhuac and a Degree in Business Administration from Harvard
University. Mr. Peñaloza Alanís is the brother of Mrs. Adriana Peñaloza Alanís.
Adriana Gabriela Peñaloza Alanís. Mrs. Peñaloza Alanís serves as member of the board of directors of
Pinfra. She has worked at a construction company, Coordinación Aplicada S.A., in the area of purchases, human
resources, marketing management and international public relations. She holds a Degree in Graphic Design from the
Universidad Iberoamericana and a Masters in Art History from Universidad Anáhuac. Mrs. Peñaloza Alanís is the
sister of Mr. David Peñaloza Alanís.
Moisés Rubén Kolteniuk Toyber. Mr. Kolteniuk Toyber serves as member of the board of directors of Pinfra.
Additionally, he currently serves as an advisor to the board of directors of Altos Hornos de México. In the past, he
GA #100224v5
worked as an advisor in the mining sector, within the Mexican Federal Government, before becoming the SubSecretary of the mining branch of the then-Secretary of Commerce and Industry. Additionally, he served as chief
executive officer of Aeropuertos del Sureste. He holds a Degree in Electromechanical Engineering from UNAM and
a Masters in Operations Research from the University of California at Berkeley. Mr. Kolteniuk Toyber is the uncle of
Carlos Césarman Kolteniuk and the father of Mr. Ricardo Carlos Kolteniuk Stolarski.
Carlos Césarman Kolteniuk. Mr. Césarman Kolteniuk serves as Chief Financial Officer, Director of Investor
Relations and Member of the board of directors of Pinfra. In the past, he worked at Industrias Campos Hermanos,
S.A. de C.V. In addition, he is founder of Inovamed, a company engaged in the administration of health. Currently, he
acts as Professor at Universidad Iberoamericana in the department of Business Administration and Economics. He
holds a bachelor’s Degree in Economics from Universidad Anáhuac. Mr. Césarman Kolteniuk is the nephew of Mr.
Moisés Kolteniuk Toyber and the cousin of Mr. Ricardo Carlos Kolteniuk Stolarski.
Luis Javier Solloa Hernández. Mr. Solloa Hernández serves as an Independent member of the board of
directors of Pinfra. He is also a partner of the firm Solloa, Tello de Meneses y Compañía S.C. In addition, he has been
examiner and member of the board of directors of various companies within the industrial, commercial and financial
sectors. He holds a Degree in Public Accounting from UNAM, a diploma in Financial Engineering from Colegio de
Contadores Públicos de Mexico and a diploma in High Management from Universidad Iberoamericana.
Luis Hoyo García. Mr. Hoyo García serves as an Independent member of the board of directors of Pinfra.
He has also been Chief Executive Officer of Agencia Aduanal and Chairman of Association of Duty Agents in
Lazaro Cárdenas, Michoacán. He graduated in Public Accounting from Universidad Anáhuac.
Ramiro Pérez Abuin. Mr. Pérez Abuin serves as Independent member of the board of directors of Pinfra. He
acted as Consultant and Auditor for Deloitte Touche Tohmatsu and Arthur Andersen. In addition, he is founder of
Marynolo and serves as Chief Executive Officer of Distribución y Servicios Logísticos S.A. de C.V. He holds a
Degree in Public Accounting from Universidad Iberoamericana and a Masters in High Management from IPADE.
Frantz Joseph Guns Devos. Mr. Guns Devos serves as Independent member of the board of directors of
Pinfra. He has worked at Aeropuertos del Sureste, IPM and Ferrocarriles del Sureste. He has also been consultant in
the areas of project management, strategic planning and corporate government. He holds a bachelor Degree in
Applied Economics from Universitaire Faculteiten Sint-Ignatius Antwerp (UFSIA).
Actions of the Board
The board of directors is the corporate body authorized to take any action in connection with our operations
not expressly reserved to our shareholders.
The board of directors must approve, among other matters:

our general strategy;

monitor our management and that of our subsidiaries;

with prior input from the audit and corporate practices committee, on an individual basis: (i) transactions
with related parties, subject to certain limited exceptions; (ii) the election of our chief executive officer, his
compensation and removal for justified causes and policies for the description and comprehensive
remuneration of other executive officers; (iii) the guidelines on our internal control and internal audit and
those of our subsidiaries; (iv) our consolidated financial statements and those of our subsidiaries; (v)
unusual or non-recurrent transactions and any transactions or series of related transactions during any
calendar year that involve (a) the acquisition or sale of assets with a value equal to or exceeding 5% of our
consolidated assets or (b) the giving of collateral or guarantees or the assumption of liabilities, equal to or
exceeding 5% of our consolidated assets, and (vi) contracts with external auditors;

calling shareholders’ meetings and acting on their resolutions;
GA #100224v5

any transfer by us of shares in our subsidiaries;

creation of special committees and granting them the power and authority, provided that the committees
will not have the authority which by-law or under our by-laws is expressly reserved for the shareholders or
our board of directors;

determining how to vote the shares that we hold in our subsidiaries; and

the exercise of our general powers in order to comply with our corporate purpose.
Meetings of the board of directors will be validly convened and held if a majority of our members are
present. Resolutions at the meetings will be valid if approved by a majority of the members of the board of directors,
unless our bylaws require a higher number. The chairman of the board of directors has a tie-breaking vote.
Notwithstanding the board’s authority, our shareholders pursuant to decisions validly taken at a shareholders’ meeting
at all times may override the board.
The LMV imposes a duty of care and a duty of loyalty on our directors. For further information, see “The
Mexican Securities Market—LMV.”
Conflicts of Interest
Members of the board and, if applicable, the secretary of the board with a conflict of interest must abstain
from participating and being present during the deliberation and voting of the matter at the relevant board of
committee meeting, without this affecting the necessary quorum for that particular meeting.
Members of the board of directors and the secretary of the board will breach their duty of loyalty to the
company and be liable for damages to it and, if applicable, its subsidiaries if they have a conflict of interest and they
vote or make a decision with respect to the company or its subsidiary’s assets or if they fail to disclose any conflict of
interest they may have unless confidentiality duties prevent them from disclosing such conflict.
Audit Committee
The LMV requires us to have an audit committee, which must be comprised of at least three independent
members appointed by the board of directors. The audit committee (together with the board of directors, which has
additional duties) replaces the statutory auditor (comisario) that previously had been required, pursuant to the
Mexican Corporations Law.
We established an audit committee at our shareholders’ meeting held on April 16, 2012. The current
members of the audit committee were appointed or ratified by the board of directors in 2011 for a one-year term. We
believe that all of the members of the audit committee are independent under the LMV and each member qualifies as
a financial expert. Standards for independence and financial expertise under Mexican law, however, differ from the
New York Stock Exchange, NASDAQ or U.S. securities law standards.
The audit committee’s principal duties are, among others (i) supervising our external auditors and analyzing
their reports; (ii) analyzing and supervising the preparation of our consolidated financial statements; (iii) informing
the board of our internal controls and their adequacy; (iv) supervising the execution of related party transactions; (v)
requesting reports from our executive officers whenever it deems appropriate; (vi) informing the board of any
irregularities that it may encounter; (vii) receiving and analyzing recommendations and observations made by the
shareholders, members of the board, executive officers or any third party and taking the necessary actions; (viii)
calling shareholder meetings; (ix) supervising the activities of our general director; and (x) providing an annual report
to the board.
As of the date of this Annual Report, the audit committee had at least one financial expert and is composed
by Messrs. Luis Javier Solloa Hernández, Luis Hoyo García and Ramiro Pérez Abuin. Mr. Luis Javier Solloa
Hernández currently serves as chairman of the committee.
GA #100224v5
Corporate Practices Committee
The LMV requires us to have a corporate practices committee, which must be comprised by independent
members appointed by the board of directors (except in the case of corporations controlled by a person or corporate
group holding 50% or more of the outstanding capital stock, in which case the majority of the members must be
independent). In accordance with such provisions of the LMV, the majority of the members of our corporate practices
committee are independent. The current members were appointed on April 29, 2011 for a one-year term.
The corporate practices committee is responsible for, among others (i) rendering its opinions to the board of
directors in connection with the performance of our key officers, (ii) report transactions with related parties, (iii)
requesting for opinions from independent third party experts, (iv) calling shareholders’ meetings, and (v) providing
assistance to the board of directors in the preparation of reports for the annual shareholders’ meeting.
As of the date of this offering memorandum, the corporate practices committee has at least one financial
expert and is composed of Messrs. Luis Hoyo García, Carlos Césarman Kolteniuk and Luis Javier Solloa Hernández.
Mr. Luis Hoyo García currently serves as chairman of the committee.
2)
SENIOR MANAGEMENT
Set forth below are the names of the members of our current senior management, their age, position, and the
appointment date of their current position. The majority of our directors reside in Mexico.
Name
Mr. David Peñaloza Alanís
Age
42
Position Held
Chief Executive Officer
Appointment Year
2001
Mr. Carlos Césarman Kolteniuk
52
Chief Financial Officer
2002
Mr. Manuel Pérez del Toro Rivera
Torres
39
Chief Operating Officer
2007
Mr. Luis Fernando Valle Álvarez
42
Financial Director
2006
Mr. Francisco Hugo Cajiga Castillo
45
General Counsel
2001
Mr. Ricardo Jorge Casares Zavala
62
Managing Director Construction
1999
Mr. Ricardo Carlos Kolteniuk Stolarski
39
Director of Purchasing
2005
Mr. Gabriel Cárdenas Cornish
46
Director New Projects
2011
Mr. Miguel Ángel Gómez Guzmán
50
Director Altipac Plant
2007
Mr. Salvador Sánchez Garza
61
Director IPM
1998
Set forth below is a summary of the business experience of our senior management, except for the members
of our senior management who are also directors, whose business experience is set forth above.
David Peñaloza Alanís. See “—Board of Directors.”
Carlos Césarman Kolteniuk. See “—Board of Directors.”
Luis Fernando Valle Álvarez. Mr. Valle Álvarez serves as Financial Director. He has 18 years of experience
in the promotion, evaluation and financing of infrastructure projects. Previously he worked at Grupo Aeroportuario
del Pacífico, Grupo Aeroportuario del Sureste and Grupo Tribasa. He holds a Degree in Economics from the
Universidad Iberoamericana.
GA #100224v5
Francisco Hugo Cajiga Castillo. Mr. Cajiga Castillo serves as General Counsel of Pinfra. Previously, he
was the General Counsel of the GOMO Group and Assistant Director in GBM. He was a professor of law at the
Universidad Iberoamericana and in the stock-exchange and finance degree program in the Escuela Bancaria y
Comercial. He graduated as a lawyer with a degree in tax law from the Escuela Libre de Derecho.
Ricardo Jorge Casares Zavala. Mr. Casares Zavala serves as Construction Director of Pinfra. He has more
than 30 years in the development, control and management of construction projects and has been with the Company
since 1997. He holds a Degree in Civil Engineering from the UNAM and a Degree in Project Management from the
Project Management Institute Pennsylvania, USA.
Manuel Pérez del Toro Rivera Torres. Mr. Pérez del Toro Rivera Torres serves as Chief Operating Officer
of Pinfra. Prior to joining Pinfra, he worked in Consorcio ARA as Director of New Projects and founded Casacom, a
company offering telecommunication and television services in residential projects of Consorcio ARA. He holds a
Degree in Administration from the Universidad Iberoamericana.
Ricardo Carlos Kolteniuk Stolarski. Mr. Kolteniuk serves as Purchase Manager of Pinfra and served the
Company as Administration Director for more than nine years. He also has experience in the financing of energy
plants from his prior work at Unisource Energy. He holds a Degree in Management from the Universidad
Iberoamericana and obtained a Master’s in Business Administration from Boston University. Mr. Kolteniuk is the
son of Mr. Moises Kolteniuk Toyber and the cousin of Mr. Carlos Cesarman Kolteniuk.
Gabriel Cárdenas Cornish. Mr. Cárdenas serves as New Projects Director of Pinfra since 2011. Prior
experience includes acting as vice-president of Grupo CFC, a company engaged in the construction of offshore
platforms, for 15 years, as well as finance director for IMPSAT. He holds a Degree in Business Administration and a
specialty in Financial Engineering from the Universidad Iberoamericana.
Miguel Ángel Gómez Guzmán. Mr. Gomez serves as Director of the Manufacturing Plants since 2007. He
has been with the Company since 1994 at such time he was the works controller manager of the Company. He
graduated from the Escuela Superior de Ingeniería Mecánica y Eléctrica from the Instituto Politécnico Nacional.
Salvador Sánchez Garza. Mr. Sánchez currently serves as Chief Executive Officer of IPM. He holds a
Degree in Chemical Engineering from the Universidad Iberoamericana, and a Masters in Administration from the
ITESM. He was director of API Altamira from 1994 until 1998 and of the Altamira Customs from 1993 until 1994.
Senior Management. The chief executive officer and members of the senior management (directivos
relevantes) of the issuer are required to focus their activities on creating value for the company. The chief executive
officer and senior management will be liable for damages to the corporation and, if applicable, its subsidiaries among
others, for: (i) favoring a single group of shareholders; (ii) approving transactions between the company (or its
subsidiaries) with “related persons” without complying with legal disclosure requirements; (iii) taking advantage for
him/herself (or authorizing a third party) of the company’s assets (or its subsidiaries), against company policy; (iv)
making inappropriate use of the company’s (or its subsidiaries) non-public information; and (v) knowingly disclosing
or revealing false or misleading information.
Our chief executive officer and executive officers are required, under the LMV, to act for our benefit and not
that of an individual shareholder or group of shareholders. Our chief executive is required, principally, to (i)
implement the instructions of our shareholders’ meeting and our board of directors; (ii) submit to the board of
directors for approval the principal strategies for the business; (iii) submit to the audit and corporate practices
committee proposals for the systems of internal control; (iv) disclose all material information to the public; and (v)
maintain adequate accounting and registration systems and mechanisms for internal control. Our chief executive
officer and our executive officers will also be subject to liability of the type described above in connection with our
directors.
As of the date of this Annual Report, with the exception of the members of the Peñaloza Family, none of our
executive officers or directors holds more than 1% of our capital stock. See “Principal Shareholders”
GA #100224v5
3)
ETHICS, CONDUCT AND TRANSPARENCY CODE
We have an ethics, conduct and transparency code applicable for all our personnel, including members
of the board of directors, officers and employees, which unifies and establishes a reference framework over the
obligations of such directors, officers and employees towards the Company, investors, clients, creditors, suppliers,
competitors and, if applicable, authorities.
Overall, the code of ethics, conduct and transparency of the Company provides for the establishment of
adequate administrative and accounting controls and standards of conduct in order to ensure a respectful and fair
treatment for its members, and compliance of the applicable legal provisions and legal framework. It also establishes
that officers and members of the board of directors shall make their business decisions seeking for the greatest
benefit for the Company and its shareholders, refraining from taking any decision if there is a conflict of interest.
Should the members of the board of directors, officers and employees conduct in contravention to the values,
principles and other applicable terms of the code of ethics, conduct and transparency, they may be creditors of a
financial penalty or may be removed from their position, depending on the severity of the respective violation.
4)
INTERNAL CONTROL
We have internal control policies and procedures designed to provide reasonable assurance that our
transactions and other aspects of our operations are carried out, recorded and reported pursuant to guidelines set forth
by our management using IFRS, applied in conformity with available interpretive guidance thereunder. In addition,
our operational processes are subject to periodic internal audits.
5)
EXTERNAL CONTROL
The Company is not controlled, directly and/or indirectly by another company or government, whether
national or foreign.
6)
COMPENSATION OF DIRECTORS AND SENIOR MANAGEMENT
The board members receive the amount of Ps.15,000.00 for each session of the Board of Directors to which
they attend as a compensation for the exercise of their position. As a whole, the remunerations received each year by
the senior management of the Company arises to a total approximate amount of Ps.41.55 million.
We do not offer a bonus plan to our senior management based on individual performance and on the results
of our operations.
7)
EXTERNAL AUDITORS
Our independent auditors are Galaz, Yamazaki, Ruiz Urquiza, S.C. (Member of Deloitte Touche Tohmatsu
Limited), whose offices are located in Paseo de la Reforma 489, 6th Floor, Colonia Cuauhtémoc, Distrito Federal,
06500. Our external auditors were appointed by our board of directors under their powers of attorney, taking into
account their experience, quality and service standards. Because we are a public stock corporation (sociedad anónima
bursátil), our external auditors are appointed by the board of directors, upon review of the audit committee, based on
the factors above. Additionally, the board must ratify appointment of external auditors annually under the
recommendation of the audit committee.
Audited consolidated financial statements included in this Annual Report were audited by Galaz, Yamazaki,
Ruiz Urquiza, S.C. (Member of Deloitte Touche Tohmatsu Limited).
Galaz, Yamazaki, Ruiz Urquiza, S.C., has served as our external auditor since 2008. From such date through
December 31, 2013, they have not issued a qualified opinion or a negative opinion, nor have they refrained from
giving an opinion on our consolidated financial statements.
During 2013, 2012 and 2011, Galaz, Yamazaki, Ruiz Urquiza, S.C. provided services to us in addition to the
GA #100224v5
audit, particularly in terms of tax, which do not affect their independence as our external auditors. As a whole, the
Company paid during 2013, 2012 and 2011 for the rendering of additional audit services, the amount of Ps.2.1
million, which represents 6.0% of all the expenditures made for Galaz, Yamazaki, Ruis Urquiza, S.C., during such
years.
8)
PRINCIPAL SHAREHOLDERS
The Principal Shareholders beneficially own approximately 43.86% of the Company’s Ordinary Shares
(including all of the Ordinary Shares and Series L Shares). As such, the Principal Shareholders will continue to have
a significant influence to determine the outcome of significant matters submitted for a vote to our shareholders, and
thus to influence our business policies and affairs.
During the last three years, there has not been any significant change in the percentage of beneficial
ownership maintained by the Principal Shareholders.
Up to the date of this Annual Report, the Company estimates that approximately 55.64% of the Ordinary
Shares currently outstanding are held by the investing public.
9)
RELATED PARTY TRANSACTIONS
We have engaged in, and we expect that we will continue to engage in, transactions with companies that are
owned or controlled, directly or indirectly, by us or our Principal Shareholders and other related parties, including,
without limitation, the transactions described below. We believe that the terms of such transactions are no less
favorable than those that could be obtained from an independent third party, assuming that there are third parties able
to provide comparable services. For more information regarding our relationships and transactions with related
parties, see the notes to our annual audited consolidated financial statements included elsewhere in this Annual
Report.
On April 25, 2007, our subsidiary Equivent, as lender, executed a loan agreement with our 50% equity
method investment, Purépecha, as borrower, in an aggregate principal amount of Ps.242.0 million. This agreement
was amended on August 20, 2007 and December 27, 2007. The proceeds of the loan were used by Purépecha to
finance the construction of the Morelia-Aeropuerto toll road and the intersection of México-Guadalajara toll road. The
maturity date of the loan is January 31, 2017. The loan bears interest at a rate of the one-month TIIE plus 3%. As of
December 31, 2014, the outstanding principal amount of such loan was Ps.289.5 million.
On December 1, 2011, our subsidiary Equivent, as lender, and Promoairtax, S.A. de C.V., as borrower,
executed a loan agreement for a principal amount of USD$6.3 million. The agreement was amended on December
30, 2011 and December 30, 2012, respectively. Promoairtax, S.A. de C.V. used the proceeds of the loan for the
acquisition of an aircraft. The maturity date of the loan is January 1, 2022. The loan bears interest at a rate of the onemonth LIBOR plus 8%. As of December 31, 2014, the outstanding principal amount of such loan was Ps.96.8
million.
We may from time to time in the future enter into transactions with our affiliates and, if so, we would be
subject to do so in compliance with all applicable Mexican laws.
10)
DESCRIPTION OF CAPITAL STOCK
Set forth below is a description of our capital stock and a brief summary of certain significant provisions of
our bylaws and Mexican law. This description does not purport to be complete and is qualified in its entirety by
reference to our bylaws and Mexican law.
General
Our predecessor company was incorporated on December 29, 1980 under the name “Grupo Tribasa, S.A. de
C.V.” as a corporation of variable capital (sociedad anónima de capital variable) organized pursuant to the Mexican
GA #100224v5
Corporations Law. At our extraordinary shareholders’ meeting held on December 14, 2005, our shareholders
approved an amendment to our bylaws to adopt the name Promotora y Operadora de Infraestructura, S.A. de C.V.
At the extraordinary shareholders’ meeting held on December 22, 2006, our shareholders approved to amend
our bylaws entirely to adjust them to the provisions of the then recently enacted LMV applicable to public
corporations, to adopt the form of a listed corporation of variable capital (sociedad anónima bursátil de capital
variable) and to change our name to Promotora y Operadora de Infraestructura, S.A.B. de C.V. A copy of our
bylaws, as amended, has been filed with, and can be examined at, the CNBV and the BMV and is available for
review at www.bmv.com.mx.
The duration of our corporate existence is indefinite. We are a holding company and conduct all of our
operations through our subsidiaries. Our corporate domicile and our headquarters are located in Mexico City,
Mexico.
Capital Stock
Because we are a publicly traded corporation with variable capital stock, our capital stock must have a fixed
portion and may have a variable portion. As of the date of this Annual Report, our subscribed and paid-in share
capital consisted of 428’086,358 Shares registered at the RNV of the CNBV, of which (i) 380’123,523 are shares of
common stock, Class I, nominative and with full voting rights, without stated par value, and (ii) 47’962,835 are Series
L Shares, nominative, with limited voting rights, without stated par value.
In the General Ordinary Shareholders’ Meeting held on April 28, 2014, it was approved to set the amount of
Ps.500 million to the repurchase fund in order to reach a total of Ps.2,500 million, which may be destined to the
repurchase of the Company’s shares.
Voting Rights and Shareholders’ Meetings
Our bylaws allow us to issue limited voting shares of series “L” which will only have the right to vote at
shareholders’ meetings adopting the following resolutions:
(i)
transformation of the company,
(ii)
cancellation of the registration of series “L” shares in the RNV,
(iii)
appointment, ratification or removal of board members pursuant to our bylaws,
(iv)
dissolution and liquidation of the company,
(v)
change of nationality of the company, and
(vi)
change of corporate purpose.
The Company also has Ordinary Shares which grant full voting rights to its shareholders. Each Common
Share entitles the holder to one vote at any shareholder’s meeting.
Under our current bylaws, we may hold two types of shareholders’ meetings: special and general
shareholders’ meetings. Special shareholders’ meetings are those called to discuss matters that may affect only one
category or series of shares.
General shareholders’ meetings may be ordinary or extraordinary. Ordinary shareholders’ meetings are
those called to discuss any issue not reserved for extraordinary shareholders’ meetings. An annual ordinary
shareholders’ meeting must be held at least once a year within the first four months following the end of each fiscal
year to discuss, among other things, the approval of our consolidated financial statements; the report prepared by the
board of directors on our consolidated financial statements; the reports of the audit and corporate practices
GA #100224v5
committees; the appointment of members of the board of directors and the determination of compensation for
members of the board of directors; the opinion of the board on the report of the General Director; and determine the
maximum amount of resources to be applied for the acquisition of our own shares.
Extraordinary shareholders’ meetings are those called to consider any of the following matters, among other
things:

an extension of the Company’s duration;

dissolution of the Company;

an increase or decrease in the Company’s capital stock;

a change in the Company’s corporate purpose;

amendments or additions to the Company’s bylaws;

any transformation of the Company;

merger or spin-off involving the Company;

issuance of preferred stock;

any stock redemption;

the issuance of bonds of any kind by the Company;

the issuance of any kind of collective notes (obligaciones) by the Company; and

the delisting of our Shares with the RNV or with any stock exchange.
Shareholders’ meetings are required to be held at our corporate domicile, which is Mexico City. Any
shareholders’ meetings may be duly called by the board of directors, the chairman of the board of directors, the
chairman of the audit committee, the chairman of the corporate practices committee, the secretary or, under certain
circumstances, by a Mexican court of competent jurisdiction. Shareholders representing 10% of our outstanding
capital stock have the right to request that the board of directors, the audit and the corporate practices committee call a
shareholders’ meeting to discuss the matters indicated in the relevant request.
Notices of shareholders’ meetings must be published in one of the newspapers of general circulation in
Mexico City at least 15 calendar days prior to the date of the meeting. Each call must set forth the place, time and
agenda for the meeting and must be signed by whoever called the meeting. From the date on which a call is
published until the date of the corresponding meeting, all relevant information (i.e., any documentation related to the
matters included in the agenda) will have to be made available to the shareholders.
To be admitted to any shareholders’ meeting, shareholders must be registered in the Company’s share
registry and present evidence of the deposit of their certificates with a financial institution, brokerage house or deposit
institution at least one day prior to the shareholders’ meeting. These documents will be exchanged for certificates
issued by us that must be used to be admitted to the meeting. Shareholders may appoint one or more attorneys-in-fact
to represent them pursuant to general or special powers of attorney or by a proxy in the form distributed by us
pursuant to applicable laws.
Quorums
The Series L Shares will only be counted for purposes of determining a quorum for a shareholders' meeting
GA #100224v5
to which their holders must be called to exercise their right to vote, that is, only be considered in the case of meetings
called to consider any of the matters in respect of which their holders have voting rights.
Ordinary meetings are legally convened on a first call when at least 70% of the shares of our outstanding
capital are present or duly represented. In the event of a second call or further calls, the meeting shall be legally
convened when at least 66.66% of the shares of our outstanding capital are present or duly represented. Resolutions at
ordinary meetings of shareholders pursuant to a first or further call are valid when approved by the holders of at least
40% of the total outstanding shares, provided that, for resolutions regarding any of the matters mentioned below, it
will require the vote of at least 66.66% of the outstanding shares:

appointment, ratification or removal of the Director General and the members of the board of directors,
and the members of the audit and corporate practices committees; and

increase or decrease in the variable portion of the Company’s capital stock with the understanding that
the corresponding proposal should have been previously submitted to the board of directors for
approval.
Extraordinary shareholders’ meetings and special shareholders’ meetings are legally convened on a first call
when at least 75% of the shares of our outstanding capital are present or duly represented. On a second or subsequent
call, extraordinary shareholders’ meetings are legally convened when at least 67% of the shares representing our
outstanding capital are present or duly represented. Resolutions at an extraordinary meeting of shareholders or special
shareholders’ meetings pursuant to a first or further call are valid when adopted by the holders of at least 50% of the
shares of our outstanding capital, provided that, for resolutions regarding any of the matters mentioned below, it will
require the vote of at least 66.66% of the shares of our outstanding capital:

increase or decrease of the minimum fixed capital with the understanding that the corresponding
proposal should have been previously submitted to the board of directors for approval;

amendments or additions to the bylaws;

merger or spin off involving the Company;

issuance of preferred stock;

redemption of shares with distributable profits, and issuance of limited voting, preferred or of any class
other than ordinary shares;

the issuance of bonds of any kind by the Company; and

the issuance of any kind of collective notes (obligaciones) by the Company.
Dividends and Distributions
At the annual ordinary shareholders’ meeting, the board of directors submits our annual audited consolidated
financial statements for the previous fiscal year to the shareholders for approval. Once shareholders approve the
financial statements, they determine the allocation of our net profits for the preceding fiscal year. By law, prior to any
distribution of profits, after deducting the amounts corresponding to income tax and employees’ profit share, we are
required to allocate 5% of our net profits to a legal reserve fund until such legal reserve fund equals 20% of our paidin capital stock. Additional amounts may be allocated to other reserve funds as the shareholders may determine,
including amounts allocated to a reserve for the repurchase of shares. The shareholders may also allocate resources
for the acquisition of shares pursuant to the applicable laws. The remaining balance, if any, may be distributed as
dividends.
All shares outstanding at the time a dividend or other distribution is declared are entitled to participate in
such dividend or other distribution. We will distribute through Indeval any cash dividends on shares held through
GA #100224v5
Indeval. Any cash dividends on shares evidenced by physical certificates will be paid by surrendering to us the
relevant dividend coupon registered in the name of its holder. See “Dividends and Dividend Policy.”
Changes to Our Capital Stock
The fixed portion of our capital stock may be increased or decreased by a resolution adopted by our
shareholders in an extraordinary shareholders’ meeting, provided that our bylaws are concurrently amended to reflect
the increase or decrease in capital stock. The variable portion of our capital stock may be increased or decreased, by
our shareholders in an ordinary shareholders’ meeting without the amendment of our bylaws.
Any increase or decrease of our capital stock, either in the fixed or variable portion, must be submitted for
approval to the board of directors.
Increases or decreases in the fixed or variable portion of our capital stock must be recorded in our registry of
capital variations, which we are required to maintain under the Mexican Corporations Law. Shareholders’ meeting
minutes by means of which the corporate fixed capital of the Company is increased or decreased must be notarized
and registered before the corresponding Public Registry of Commerce. New shares cannot be issued unless the issued
and outstanding shares at the time of the issuance have been paid in full, except in certain limited circumstances.
Share Repurchases
We may choose to acquire our own shares through the BMV, pursuant to the LMV, on the following terms
and conditions:

the acquisition must be carried out through the BMV;

the acquisition must be carried out at market price, unless a public tender offer has been authorized by
the CNBV;

the acquisition must be carried out against our net worth account (capital contable) without a reduction
of capital stock or against our capital stock, and the shares so acquired will be held as treasury stock
without any requirement to adopt a reduction in capital stock (no shareholder approval is required for
such purchases);

the amount and price paid in all share repurchases must be made public;

the annual ordinary shareholders meeting must determine the maximum amount of resources to be
used in the fiscal year for the repurchase of shares, provided that the aggregate amount of resources in
no event shall exceed the total balance of the net earnings of the Company, including retained
earnings;

we may not be delinquent on payments due on any outstanding debt issued by us that is registered with
the RNV; and

any acquisition of shares must comply with the requirements of Article 54 of the LMV, and we must
maintain a sufficient number of outstanding shares to meet the minimum trading volumes required by
the stock markets on which our shares are listed.
The economic and voting rights corresponding to repurchased shares may not be exercised during the period
in which we own such shares, and such shares are not deemed to be outstanding for purposes of calculating any
quorum or vote at any shareholders’ meeting during such period.
Ownership of Capital Stock by Subsidiaries
Our subsidiaries may not, directly or indirectly, invest in our shares, except for shares acquired as part of an
GA #100224v5
employee stock option plan and in conformity with the LMV.
Redemption
In accordance with our bylaws, shares representing our capital stock are subject to redemption in connection
with either (i) a reduction of capital stock, or (ii) a redemption with retained earnings, which in either case must be
approved by our shareholders.
A redemption of shares arising from a capital reduction must be made pro rata among our shareholders. In
the case of a redemption with retained earnings, such redemption shall be conducted (i) by means of a tender offer
conducted on the BMV at prevailing market prices, in accordance with Mexican law and our bylaws, (ii) pro rata
among the shareholders, or (iii) if the redemption is at a price different from the prevailing market price, shares to be
redeemed shall be selected by lot.
Dissolution or Liquidation
Upon dissolution of the Company, one or more liquidators must be appointed at an extraordinary
shareholders’ meeting to wind up the Company’s affairs. All fully paid and outstanding shares of capital stock will be
entitled to participate equally in any liquidation proceeds.
Registration and Transfer
All of our Shares are currently registered with the RNV as required under the LMV and regulations issued
by the CNBV. Shares are evidenced by certificates issued in registered form, which are deposited with Indeval at all
times. Our shareholders may only hold their shares in book-entry form, through participants having accounts with
Indeval. Indeval is the holder of record in respect of all of the Shares. Accounts may be maintained at Indeval by
brokers, banks and other Mexican and non-Mexican financial institutions and entities authorized by the CNBV to be
participants at Indeval. In accordance to Mexican law, only persons listed in our stock registry, and holders of
certificates issued by Indeval coupled with certificates issued by Indeval participants, will be recognized as our
shareholders; under the LMV, certifications issued by Indeval, together with certifications issued by Indeval
participants, are sufficient to evidence ownership of our Shares and to exercise rights in respect of those Shares, at
shareholders’ meeting or otherwise. Transfers of shares must be registered through book entries that may be traced
back to the records of Indeval.
Preemptive Rights
Except as described below, under Mexican law and our bylaws, our shareholders have preemptive rights for
the subscription and payment of newly issued shares or capital stock increases. Generally, if we issue additional
shares of capital stock, our stockholders will have the right to purchase the number of shares necessary to maintain
their existing ownership percentage. Shareholders must exercise their preemptive rights within 15 calendar days
following the holding of the shareholders’ meeting in the event that the total outstanding shares had been present or
duly represented, or the publication of notice of the issuance in the Official Gazette or in the official gazette of the
company’s corporate domicile (e.g., Mexico City).
Preemptive rights will not apply to (i) shares issued to all of the shareholders due to capitalization of share
subscription premiums, retained profits, or other reserves, (ii) capital increases through the issuance of unsubscribed
shares to be place in a public offering pursuant to Article 53 of the LMV, (iii) shares issued by us in connection with
mergers, (iv) the resale by us of shares held in our treasury as a result of repurchases of shares conducted by us on the
BMV, and (v) shares held in treasury for the conversion of collective notes (obligaciones) under Article 210 of the
General Law of Credit Titles and Operations (Ley General de Títulos y Operaciones de Crédito).
Certain Minority Protections
Below is a description of certain minority rights set forth in our bylaws, pursuant to the LMV and the
Mexican Corporations Law:
GA #100224v5

holders of at least 10% of our outstanding share capital (including Series L Shares as well as any other
limited or restricted voting shares), in the aggregate, are entitled to vote; (i) to request a call for a
shareholders’ meeting, (ii) to request that resolutions, with respect to any matter on which they were
not sufficiently informed, be postponed, and (iii) to appoint or revoke the appointment of one member
of our board of directors and one alternate member of our board of directors;

holders of at least 20% of our outstanding share capital, including Series L Shares, may oppose any
resolution adopted at a shareholders’ meeting in which such opposing shareholders were entitled to
vote, and file a petition for a court order to suspend the resolution if the claim is filed within 15 days
following the adjournment of the meeting at which the action was taken, provided that (i) the
challenged resolution violates Mexican law or our bylaws, (ii) the opposing shareholders neither
attended the meeting nor voted in favor of the challenged resolution, and (iii) the opposing
shareholders deliver a bond to the court to secure payment of any damages that we may suffer as a
result of suspension the resolution in the event that the court ultimately rules against the opposing
shareholder; and

holders of at least 5% of our outstanding shares, including Series L Shares, may initiate an action for
civil damages against some or all of our board members, as a shareholder derivative suit, for violations
of the duty of care or the duty of loyalty, for our benefit, in an amount equal to the damages or losses
caused to us; however, any such actions have a five-year statute of limitations.
The substantive law concerning fiduciary duties of directors has not been the subject of comprehensive
interpretation by the courts in Mexico unlike many states in the United States where duties of care and loyalty
elaborated by judicial decisions help to shape the rights of minority shareholders. The protections afforded to minority
shareholders under Mexican law are different from those in the United States and many other jurisdictions.
Shareholders cannot challenge corporate action taken at a shareholders’ meeting unless they meet certain procedural
requirements, as described above.
Due to the foregoing, it may, in practice, be more difficult for our minority shareholders to enforce rights
against us or our directors or principal shareholders than it would be for shareholders of a U.S. public company.
Share Purchase Restrictions
Our bylaws set include provision where under, generally, any person or group of persons wishing to acquire
3% or more of the outstanding shares of capital stock of Pinfra (or instruments convertible in shares or rights with
respect to shares) from any of the members of the Peñaloza Family, in a single transaction or a series of transactions,
must obtain the prior approval from the board of directors with the affirmative vote of at least 66.66% of the total
number of directors. In the event that the intended purchaser obtains the board approval, it will be obligated to
perform, simultaneously with the acquisition, a mandatory tender offer for the purchase of the total outstanding shares
(or instruments referred to or convertible into shares), unless the board waives such requirement when issuing its
approval, in the understanding that, if after the board’s approval but prior to the conclusion of the purchase, the board
receives an offer from a third party to purchase the total outstanding shares (or instruments referred to as convertible
into shares) which terms are better for the shareholders, the board may revoke the approval previously granted and
authorize the new transaction.
For the board’s approval to be effective it is necessary that the sale or public tender offer of shares (or
instruments referred to or convertible into shares) is performed at a price not lower than the greater of (i) the average
trading price of the shares in the BMV on the closing of operations during the six-months immediately prior to the
date in which the sale is closed or the tender offer is performed, or (ii) the highest price in which the shares have been
traded during the 365 days prior to the date of payment of the purchase price or the beginning of the tender offer.
These mandatory tender offer provisions of our by-laws generally are more stringent than similar provisions
contained in the current LMV. Where the provisions of our by-laws are more protective of minority shareholders than
the current LMV, our by-laws will apply.
The above provision will not apply if the transfer of shares by any member of the Peñaloza Family is to such
GA #100224v5
member’s successors.
In the event of violation of the above provisions, the breaching purchasers or shareholders will not be
entitled to exercise the rights with respect to the relevant shares (including economic rights) and such shares will not
be taken into account to determine the quorum or required majorities for the approval of resolutions at any
shareholders’ meetings. The Company will abstain from registering the purported purchasers or shareholders in the
stock registry ledger without giving effect to the registration undertaken by a depositary of securities pursuant to the
applicable legislation. The purchaser who acquires shares in violation of these provisions will have to sell the shares
to a third party who is approved and appointed by the board by the affirmative vote of at least 66.66% of the total
number of directors.
Delisting or Cancellation of Registration with the RNV
Delisting or cancellation of the registration of the Shares with the RNV may be due to (i) resolution by the
CNBV, or (ii) resolution of our shareholders at an extraordinary shareholders’ meeting with the affirmative vote of
shares (including Series L Shares as well as any other limited or restricted voting shares) representing at least 95% of
the capital of the Company, with the approval of the CNBV.
In any of the forgoing scenarios, we will be required to perform a mandatory tender offer for the purchase of
the shares directed to shareholders other than the Principal Shareholders, except in the cases described in the
following section. In case we are required to make a mandatory tender offer, such offer will be extended to both the
Ordinary Shares and the Series L Share at the same price.
In accordance with applicable regulations and our bylaws, in the event that the Principal Shareholders are
unable to purchase all of our outstanding Shares pursuant to a tender offer, they will be required to create a trust for a
period of at least six months and contribute to it funds in an amount sufficient to purchase, at the same price offered
pursuant to the tender offer, all of the outstanding shares that remain held by the general public.
The offer price will be the higher of: (i) the weighted average quotation price per share on the BMV for the
previous 30 days prior to the date on which the tender offer is made, or (ii) the book value of the shares in accordance
with the most recent quarterly report submitted to the CNBV and the BMV.
Exceptions to Tender Offers in case of Cancellation of Registration with the RNV
In accordance with applicable law, the Company will be entitled to request from the CNBV the cancellation
of the registration of the Shares with the RNV without performing a tender offer in the following cases:
(i) if shareholders representing at least 95% of the capital of the Company (including Series L Shares as well
as any other limited or restricted voting shares), granted their consent, through an extraordinary shareholders’
meeting, for the cancellation of the registration and that the amount to be offered for the acquisition of the shares held
by public investors is less than 300,000 UDIs; or
(ii) if the Company is merged with another publicly traded company, when the latter evidences to the CNBV
one of the following events: (a) the consummation of a tender offer for 100% of the shares representing the capital of
the Company; or (b) obtaining an authorization from the CNBV to be exempt from performing a tender offer in the
case of operations that are consistent with the protection of our minority shareholders’ interests.
In the first case, the Company will be required to create a trust similar to that described in the previous
section. See “—Delisting or Cancellation of Registration with the RNV.” In the second case, the Company will only
be required to create a similar trust if one of the shareholders does not receive the shares of the merged company.
Tender Offer Rules
A mandatory tender offered is required to be made pursuant to the LMV by any person or group of persons
that, directly or indirectly, in a single transaction or in a series of transactions, intends to acquire control of our
GA #100224v5
outstanding shares (or any percentage of our outstanding shares equal to or exceeding 30% of our outstanding shares).
Such tender offer must be for (i) the percentage of shares equal to the proportion of shares that are intended to be
purchased in relation to the total shares intended to be purchased or 10% of the total Shares, whichever is higher,
provided that the purchaser limits the offer to a percentage which does not implicate control of the Company; or (ii)
for 100% of our outstanding Shares if the purchaser intends to obtain control of the Company at a price equal to the
greater of (a) the average trading price for our shares for the 30 trading days prior to the offer; or (b) the last reported
book value per share. The LMV defines control, for these purposes, as (i) the ability to impose decisions, directly or
indirectly, at a stockholders’ meeting, (ii) the right to vote 50% or more of our shares, or (iii) the ability to cause,
directly or indirectly, that our management, strategy or policies be pursued in any given fashion.
In connection with a tender offer, our board of directors is required, subject to the prior opinion of our
corporate practices committee, to opine in respect of the price of the offer. Prior to expressing such opinion, our
board of directors may request the opinion of an independent third party expert. Likewise, the board members and the
Director General must disclose to the public, with the referred-to opinion, the decision they will take with respect the
Shares or instruments referred to Shares that they own.
Additional Matters
Variable Capital
We are permitted to issue shares representing fixed capital and shares representing variable capital. The
issuance and redemption of variable-capital shares, unlike the issuance of fixed-capital shares, does not require an
amendment of the bylaws, although it does require a majority vote of our Shares as herein described. To this date, the
capital stock of the Company is divided in shares that only represent the fixed portion of the capital stock.
Forfeiture of Shares
As required by Mexican law, our bylaws provide that any non-Mexican shareholder shall be considered as a
Mexican citizen with respect to Shares held by them, property rights, concessions, participations and interests we own
and rights and obligations derived from any agreements we have with the Mexican Government. Non-Mexican
shareholders shall be deemed to have agreed not to invoke the protection of their governments, under penalty, in the
event of breach of such agreement, of forfeiture to the Mexican Government of such interest or participation.
Mexican law requires that such a provision be included in the bylaws of all Mexican corporations unless such bylaws
prohibit ownership of shares by non-Mexican persons.
Conflict of Interest
A shareholder having a conflict of interests with those of the Company is, pursuant to the Mexican
Corporations Law, required to abstain from any deliberation on the applicable matter. A breach of this provision by
any shareholder may result in the shareholder being liable for damages to the extent the transaction would not have
been approved without such shareholders’ vote.
GA #100224v5
V. CAPITAL MARKETS
1)
SHAREHOLDING STRUCTURE.
The corporate capital of the Company is represented by 428’086,358 Shares registered at the RNV, of which
(i) 380’123,523 are Ordinary Shares, Class I, nominative and with full voting rights, without stated par value, and (ii)
47’962,835 are Series L Shares, nominative, with limited voting rights, without stated par value. The Shares of the
Company were first listed in the BMV on September 22, 1993, under the key word “PINFRA”.
2)
SHARE BEHAVIOR IN THE SECURITIES MARKET.
The following charts show the maximum and minimum listing prices of the Ordinary Shares in the BMV
during the indicated periods and quarters:
For each one of the following years:
Maximum
Minimum
Average
Beginning of the Period
End of the Period
Volume
2010
$
44.70
$
26.11
$
32.52
$
29.30
$
43.90
62,606,900
2011
$
59.80
$
41.35
$
52.02
$
43.90
$
59.80
42,285,300
2012
$
86.20
$
54.48
$
64.95
$
59.80
$
86.20
82,739,600
2013
$
159.00
$
86.20
$
120.02
$
86.20
$
156.02
244,725,000
2014
$
190.68
$
150
$
175.79
$
156.02
$
177.39
168,559,100
For each one of the following quarters:
Maximum
Minimum
Average
Beginning of the Period
End of the Period
1/2015
$
182.47
$
162.71
$
171.60
$
177.39
$
162.71
Volume
39,560,100
4/2014
$
190.40
$
186.05
$
176.09
$
184.62
$
177.39
39,036,900
3/2014
$
190.68
$
171.00
$
180.24
$
173.34
$
184.62
36,804,300
2/2014
$
185.00
$
169.20
$
179.28
$
176.08
$
173.34
45,551,700
1/2014
$
179.55
$
150.00
$
167.38
$
156.02
$
176.08
54,048,632
4/2013
$
159.00
$
126.00
$
144.77
$
126.00
$
156.02
82,491,100
3/2013
$
145.45
$
118.53
$
131.40
$
119.8
$
125.78
66,706,100
2/2013
$
122.5
$
99.1
$
112.17
$
100.38
$
118.99
50,163,500
1/2013
$
99.83
$
86.20
$
90.74
$
86.20
$
99.83
45,364,300
4/2012
$
88.00
$
65.00
$
73.51
$
70.01
$
86.20
60,089,700
3/2012
$
74.5
$
62.20
$
69.12
$
63.00
$
70.33
6,386,700
2/2012
$
65.00
$
54.1
$
59.44
$
55.3
$
62.79
11,472,100
1/2012
$
59.5
$
55.21
$
57.67
$
55.5
$
55.29
3,550,000
The following charts show the maximum and minimum trading prices of the Series L Shares in the BMV
from their placement date and during the 8 following months:
Date and placement price: July 15, 2014; Ps.$172.00 (one hundred seventy two Pesos 00/100 M.N.) per Share.
Maximum
July 2014 (starting
on the 15)
$
GA #100224v5
169.74
Minimum
Average
Beginning of the Period
End of the Period
$
$
$
$
163.69
168.42
170
163
Volume
10,476,893
August 2014
$
171.9
$
161.91
$
167.61
$
163
$
169.20
5,179,814
September 2014
$
175.92
$
165.92
$
170.22
$
169.20
$
167
3,294,853
October 2014
$
171.07
$
164
$
167.62
$
167
$
170.49
2,863,048
November 2014
$
171.49
$
158.11
$
165.22
$
170.49
$
157.50
3,733,393
December 2014
$
159.65
$
146.45
$
154.29
$
157.50
$
156.88
5,476,464
January 2015
$
166.66
$
150.6
$
158.95
$
156.88
$
158.50
3,553,468
February 2015
$
165.65
$
157.68
$
160.9
$
158.50
$
159.10
2,675,696
March 2015
$
160.45
$
148.9
$
159.14
$
159.10
$
148.44
1,456,409
GA #100224v5
EXHIBIT “A”
AUDITED FINANCIAL STATEMENTS
PROMOTORA Y OPERADORA DE INFRAESTRUCTURA, S.A.B. DE C.V.
GA #100224v5
Promotora y Operadora de
Infraestructura, S. A. B. de C. V. and
Subsidiaries
Consolidated Financial Statements for the
Years Ended December 31, 2014 and 2013,
and Independent Auditors’ Report Dated
March 23, 2015
Promotora y Operadora de Infraestructura, S. A. B. de C. V. and Subsidiaries
Independent Auditors’ Report and Consolidated
Financial Statements for 2014 and 2013
Table of Contents
Page
Independent Auditors’ Report
1
Consolidated Statements of Financial Position
3
Consolidated Statements of Income and Other Comprehensive Income
4
Consolidated Statements of Changes in Stockholders’ Equity
6
Consolidated Statements of Cash Flows
7
Notes to Consolidated Financial Statements
9
Independent Auditors’ Report to the Board
of Directors and Stockholders of Promotora
y Operadora de Infraestructura, S. A. B. de
C. V. and Subsidiaries
We have audited the accompanying consolidated financial statements of Promotora y Operadora de Infraestructura,
S. A. B. de C. V. and Subsidiaries (the Company), which comprise the consolidated statements of financial position
as of December 31, 2014 and 2013, and the related consolidated statements of income and other comprehensive
income, consolidated statements of changes in stockholders’ equity and consolidated statements of cash flows for the
years then ended and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance with International Financial Reporting Standards, as issued by the International Accounting Standards
Board and for such internal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We
conducted our audits in accordance with International Standards on Auditing. Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. In making those risk assessment, the auditor considers internal control relevant to the Company’s preparation
and fair presentation of the consolidated financial statements, in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management of the Company, as well as evaluating the overall presentation of the
consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
Promotora y Operadora de Infraestructura, S. A. B. de C. V. and Subsidiaries as of December 31, 2014 and 2013 and
its financial performance and its cash flows for the years then ended in accordance with International Financial
Reporting Standards, as issued by the International Accounting Standards Board.
Other matter
The accompanying financial statements have been translated into English for the convenience of the readers.
Galaz, Yamazaki, Ruiz Urquiza, S. C.
Member of Deloitte Touche Tohmatsu Limited
C. P. C. José Gabriel Beristáin Salmerón
Mexico City, Mexico
March 23, 2015
2
Promotora y Operadora de Infraestructura, S. A. B. de C. V. and Subsidiaries
Consolidated Statements of Financial Position
As of December 31, 2014 and 2013
(In thousands of Mexican pesos)
Assets
Current assets:
Cash and cash equivalents
Investments in securities
Accounts receivable – Net
Inventories – Net
Prepaid expenses
Total current assets
Investments in securities
Notes receivable - long-term
Notes
20
6 and 20
2014
$
7
8
346,609
9,038,358
521,019
98,394
84,020
10,088,400
2013
$
407,735
7
10
106,481
104,368
Property, machinery and equipment – Net
11
675,333
577,336
12,705,717
12
13
1,548,971
590,698
Deferred income taxes
25
532,568
848,095
Other assets
14
494,319
374,441
Assets held for sale
15
18,875
20,328
$
27,009,616
$
17
21
2013
95,699
286,242
245,874
47,884
2,315
406,241
327,194
1,411,449
$
70,675
744,059
183,741
145,455
261,423
1,405,353
Reserve for major maintenance
19
178,512
192,876
Employee retirement obligations
18
6,816
7,046
Bank loans
16
3,385,659
Assigned collection rights, net
Total liabilities
17
3,223,745
8,206,181
8,372,310
9,977,585
22
800,112
537,361
1,337,473
719,772
537,361
1,257,133
2,500,000
(96,622)
9,127,593
5,928,519
17,459,490
2,000,000
(8,944)
1,277,820
4,211,308
7,480,184
Stockholders’ equity:
Contributed capitalNominal capital stock
Restatement for hyperinflationary effects
-
11,335,177
Investment in shares of associated companies and joint
ventures
Total
20
16
2014
362,361
Real estate held for future use
Investments in concessions – Net
Current liabilities:
Trade accounts payable
Current portion of bank loans
Current portion of assigned collection rights
Interest payable
Hedging instruments
Construction provision
Accrued expenses and taxes payable
Total current liabilities
Notes
759,634
431,217
9
110,137
2,973,779
535,909
86,074
40,010
3,745,909
Liabilities and stockholders’ equity
$
18,718,347
Earned capital Reserve for acquisition of shares
Repurchased shares
Premium on stock placement
Retained earnings
Accumulated other comprehensive income - valuation of
hedging instruments, net of income tax
2,313
Controlling interest
Noncontrolling interest
Total stockholders’ equity
Total
-
18,799,276
4,159
18,803,435
$
27,009,616
8,737,317
3,445
8,740,762
$
18,718,347
See accompanying notes to consolidated financial statements.
3
Promotora y Operadora de Infraestructura, S. A. B. de C. V. and Subsidiaries
Consolidated Statements of Income and Other
Comprehensive Income
For the years ended December 31, 2014 and 2013
(In thousands of Mexican pesos, except per share data)
Notes
Revenues:
Concessions
Sale of materials
Construction
2014
$
Costs:
Concessions
Sale of materials
Construction
2013
4,702,421
474,105
1,679,173
6,855,699
$
4,394,076
410,515
1,017,557
5,822,148
1,397,226
361,374
1,405,003
3,163,603
1,448,648
275,038
774,716
2,498,402
3,692,096
3,323,746
29,587
145,752
37,067
82,910
Operating income
3,808,261
3,369,589
Financing costs
Financing income
Exchange gain, net
1,603,286
(269,421)
(56,794)
1,277,071
1,133,544
(182,189)
(4,240)
947,115
(74,527)
(80,774)
Gross profit
Operating expenses
Other income, net
Equity in results of associated companies and joint
ventures companies
13
Income before income taxes and discontinued operations
Income tax expense
25
Income before discontinued operations
Discontinued operations – net
2,605,717
386,339
2,503,248
310,953
2,219,378
2,192,295
(1,453)
15
Consolidated net income
(1,453)
2,217,925
2,190,842
Other comprehensive income, net of income tax
Items that may be reclassified subsequently to profit or
loss:
Net fair value gain of hedging instruments
Deferred income tax effect of hedging instruments
Total comprehensive income for the year
3,007
(694)
21
21
$
2,220,238
$
2,190,842
(Continued)
4
2014
Notes
2013
Profit (loss) for the year attributable to:
Owners of the Company
Non-controlling interest
$
2,217,211
714
$
2,190,842
(886)
Consolidated net income
$
2,217,925
$
2,189,956
Total comprehensive income for the year attributable to:
Owners of the Company
Non-controlling interests
$
2,219,524
714
$
2,191,728
(886)
$
2,220,238
$
2,190,842
$
5.53
$
5.76
Basic earnings per common share (in pesos)
Weighted average shares
401,245,708
380,123,523
See accompanying notes to consolidated financial statements.
5
Promotora y Operadora de Infraestructura, S. A. B. de C. V. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity
For the years ended December 31, 2014 and 2013
(In thousands of Mexican pesos)
Contributed capital
Capital stock
Earned capital
Reserve for stock acquisition
Accumulated other
Nominal
Balances as of January 1, 2013
$
719,772
$
Subscribed but
Restatement for
hyperinflationary
Reserve
for acquisition of
unpaid capital
effects
shares
-
$
537,361
$
923,920
Increase in the reserve for
acquisition of shares
-
-
-
Repurchase of shares
-
-
-
-
Comprehensive income for the
year
-
-
-
-
Balances as of December 31, 2013
719,772
-
-
-
-
Repurchase of shares
-
-
-
Increase of capital stock, net of
issuance expenses
82,774
802,546
Other comprehensive income valuation of hedging
instruments, net of income tax
Net income for the period
Consolidated comprehensive
income for the year
Balances as of December 31, 2014
$
1,076,080
537,361
Increase in the reserve for
acquisition of shares
(2,434)
(2,434)
$
Repurchased
Premium on
relocation and stock
comprehensive income
– valuation of hedging
shares
placement
instruments
-
-
1,272,827
1,277,820
-
-
2,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
802,546
$
(2,434)
$
537,361
$
2,500,000
$
(96,622)
$
9,127,593
-
-
6,554,757
-
-
(3,951)
3,445
8,740,762
-
(500,000)
-
-
-
3,711,308
2,313
2,313
2,313
$
(86,080)
-
7,928,515
16,583,197
3,445
-
-
$
$
4,211,308
-
-
(1,076,080)
4,331
-
7,848,175
9,127,593
-
$
2,189,956
(96,622)
-
equity
(886)
-
-
interest
2,190,842
1,598
-
3,096,546
Total
stockholders’
-
(87,678)
-
$
-
(8,944)
-
4,993
-
500,000
$
(8,944)
2,000,000
537,361
$
Retained earnings
Noncontrolling
-
2,313
2,217,211
714
2,217,925
2,217,211
714
2,220,238
5,928,519
$
4,159
$
18,803,435
See accompanying notes to consolidated financial statements.
6
Promotora y Operadora de Infraestructura, S. A. B. de C. V. and Subsidiaries
Consolidated Statements of Cash Flows
For the years ended December 31, 2014 and 2013
(In thousands of Mexican pesos)
2014
Operating activities:
Income before income taxes and discontinued operations
Items related to investing activities:
Depreciation and amortization
Construction provision
Financing income
Equity in results of associated and joint ventures companies
Items related to financing activities:
Financing costs
Hedging instruments
Fluctuation in the value of investment units (UDIs)
(Increase) decrease in:
Investment in trading securities
Accounts receivable
Inventories
Prepaid expenses
Real estate held for future use
Other assets
Trade accounts payable
Provisions
Accrued expenses and taxes payable
Income taxes paid
Reserve for major maintenance
Employee retirement obligations
Net cash flows provided by operating activities
Investing activities:
Receivable notes long-term
Acquisition of property, machinery and equipment
Proceeds from property, machinery and equipment
Investment in concessions
Prepaid expenses
Investment in associated companies
Investment in securities held-to maturity
Net cash flows used in investing activities
$
2,605,717
2013
$
2,503,248
286,605
275,739
(24,024)
(74,527)
3,069,510
344,165
1,679
(18,203)
(80,774)
2,750,115
1,124,113
5,322
217,376
4,416,321
758,901
374,643
3,883,659
406,076
14,890
(12,320)
(44,010)
(2,113)
(6,657)
25,024
(14,953)
(53,579)
47,844
(14,364)
(230)
4,761,929
(616,551)
288,869
(277)
81,278
(8,361)
(6,345)
10,272
27,366
(181,639)
33,573
81,811
1,711
3,595,366
(44,832)
(189,031)
19,340
(1,585,451)
(113,221)
(883,746)
(6,147,397)
(8,944,338)
(7,039)
(70,908)
3,573
(1,317,468)
(38,949)
(135,414)
(594,045)
(2,160,250)
7
2014
Financing activities:
Repayment of bank loans, assigned collection rights and other
associated expenses
Payment for debt issue costs
Proceeds from bank loans
Proceeds from borrowings
Interest paid
Repurchase of shares, net
Increase of capital stock, net of issuance expenses
Net cash flows used in financing activities
(4,563,273)
(664,864)
1,654,511
813,221
(691,790)
(86,080)
7,928,515
4,390,240
Net increase in cash and cash equivalents
Effects from exchange rate changes on cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
2013
$
(730,897)
(656,999)
(8,944)
4,993
(1,391,847)
207,831
43,269
28,641
1,890
110,137
64,978
346,609
$
110,137
See accompanying notes to consolidated financial statements.
8
Promotora y Operadora de Infraestructura, S. A. B. de C. V. and Subsidiaries
Notes to Consolidated Financial Statements
For the years ended December 31, 2014 and 2013
(In thousands of Mexican pesos)
1.
Nature of business
Promotora y Operadora de Infraestructura, S. A. B. de C. V. (“Pinfra”) and Subsidiaries (collectively, the
Company) are engaged in the use and operation of concessions, related to highways, ports and other types of
concessions. The Company also obtains revenues from the sale of asphalt mix and aggregates (crushed basalt)
mainly used for asphalt layers, and the construction of engineering works projects. The Company is
incorporated in Mexico City and its address is Bosques de Cidros 173, Col. Bosques de las Lomas, 11700
México D. F.
2.
Significant events
The relevant events in the period are as follows:
a.
Public share offering
On July 15, 2014, the Company carried out a national and international public offering in which it
issued 42,970,485 Series L shares (without considering the exercise of the overallotment option) at a
placement price of $172 Mexican pesos, per share, through the Mexican Stock Market. Due to the
success of the offering, the overallotment option authorized in the primary public offering of 6,445,573
Series L shares was exercised, of which 4,992,350 were offered on different dates at an average price
per share of $171.269 Mexican pesos, leaving 1,453,223 shares subscribed but unpaid, in treasury
Accordingly, the entire offer was comprised of a total of 49,416,058 shares (considering the exercise
of the overallotment option) at par value of $1.67503826 Mexican pesos per share, represented by an
increase in common stock of $82,774, offset by subscribed, unpaid capital of $2,434, comprising the
unpaid shares held in treasury presented in the statement of changes in stockholders’ equity. The offer
generated a share placement premium of $7,848,175, net of issuance costs of $317,444.
b.
Restructuring, expansion of credit and comprehensive modification of financing for the Mexico
City - Toluca highway
On August 15, 2014, the Company carried out the restructuring of the securitized certificates PADEIM
06U, PADEIM 06-2U and PADEIM 09U (collectively the “CB’s”) backed by the collection rights for
the Mexico City-Toluca Highway, section Constituyentes and Reforma – La Venta. The total of the
preferred and subordinated securitized certificates prepaid on that date, considering the resources
available in the trust, is composed as follows:
As of August 15, 2014
Amount
(thousands of
Number of UDIs
Preferred securitized certificates PADEIM
06-U (maturity on February 15, 2028)
567,907,640
Value of UDI
$
5.147888
pesos)
$
2,923,525
9
As of August 15, 2014
Number of UDIs
Subordinated securitized certificates PADEIM
06-2U (maturity on February 15, 2030)
Subordinated securitized certificates PADEIM
09-U (maturity on February 15, 2030)
Total securitized certificates payable
Value of UDI
Amount
(thousands of
pesos)
337,181,493
5.147888
1,735,773
237,363,248
1,142,452,381
5.147888
5.147888
1,221,919
5,881,217
Funds in investments in short-term securities
subaccount dedicated as prepayment of
preferred securitized certificates PADEIM
06-U
Restricted funds in investments in securities
(250,083)
(409,000)
$
5,222,134
The following agreements were executed for compliance with the obligations and acceptance of the
aforementioned prepayment, on August 8, 2014:

On August 8, 2014, Nacional Financiera, S.N.C. Institución de Banca Mútiple (“NAFIN”), in
its capacity as fiduciary of the trust No. 80572, assigned all its rights and all the obligations to
the trust NAFIN No. 80481 and the latter assumed the payment obligations of principal, interest
and other additional charges of the unsecured subordinated loan dated March 12, 2009
(“Original Credit”), recognizing that the balance of principal of the unsecured credit at the date
of the assignment contract owed to BANOBRAS is 558,130,767 UDIs.

Additionally, on August 8, 2014, NAFIN, as fiduciary of irrevocable trust number 80481,
Promotora y Administradora de Carreteras, S. A. de C. V. (“PACSA”, a subsidiary), Banco
Nacional de Obras y Servicios Públicos, S. N. C. (“BANOBRAS”) and BBVA Bancomer, S. A.
(“Bancomer”) executed the Agreement for Restructuring, Increase of Credit and
Comprehensive Modification (the “ Restructuring Agreement”) in the amount of $4,500,000
which will be comprised of BANOBRAS providing a principal amount not exceeding the
established amount of $3,000,000, and Bancomer granting an unsecured credit of $1,500,000,
payable in quarterly installments, with interest at the Mexican Interbank Equilibrium rate
(“TIIE”) rate plus a variable spread previously agreed, ranging from 1.90% up to 2.65%,
payable quarterly. The source of payment is comprised of the collection rights derived from the
Mexico City-Toluca Highway, Section Constituyentes and Reforma – La Venta (see Note 16).
The Restructuring Agreement recognizes that the portion of the Original Credit owed to
BANOBRAS as of that date is 558,130,767 UDIs; the parties agreed that as of such date, the
Company will pay 5,381,662 UDIs at their Mexico peso equivalent, together with the interest
earned as of August 15, 2004, for the installment scheduled for such period. Subsequent to such
payment, the unpaid balance of the Original Credit is 552,749,105 UDIs. PACSA and
BANOBRAS agree that such balance should be converted to its Mexican peso equivalent as of
August 15, 2014, and such amount will form part of the unpaid balance of the new credit
established in the Restructuring Agreement (see Note 17).
Furthermore, in the Restructuring Agreement, the creditors independently agree to grant an
increase of the amount of the credit for a total amount of $1,654,510 (“the Increase”). The
principal destination for the resources from the Increase is (i) the advance payment of the
Preferred Securitized Certificates (PADEIM 06U) and (ii) the payment of commissions and
other expenses related to the Restructuring Agreement (see Note 16).
As part of the obligations established in the Restructuring Agreement, on August 8, 2014 the
Company signed a financial derivatives contract to cover its exposure to interest rate volatility
risks.This hedge contemplates an initial notional amount equivalent to 50% of the amount
granted under the Restructuring Agreement, with an effective term of five years (see Note 21).
10
c.
Prepayment of the Securitized Certificates of the Tenango- Ixtapan de la Sal Highway
On February 17, 2014, securitization certificates TENIXCB 14U for the Tenango-Ixtapan de la Sal
Highway were issued by Banco Invex, S. A., Institución de Banca Múltiple, with Invex Grupo
Financiero acting as fiduciary of the issuing trust F/1646, Autopista Tenango Ixtapan de la Sal, S. A.
de C. V. (“Atisa”, a subsidiary) and Pinfra Sector Construcción, S. A. de C. V. (“Pinseco”, a
subsidiary) as trustors, and Monex Casa de Bolsa, S. A. de C. V., Monex Grupo Financiero, as
common representative of the holders of the securitization certificates, for 158,057,900 UDIs
equivalent to $813,221; the expenses originated in the issuance were $14,248. This new issue was used
to pay in advance the prior securitized certificates (TENANCB 05U) for $814,434, resulting in the
recognition of financial expenses of $14,830. The refinance was carried out in order to take advantage
of the favorable conditions of the credit market, whereby the interest rate was set at a fixed annual rate
of 5%.
d.
Siglo XXI concession acquisition
On November 28, 2013, the Company together with a consortium of investors, formed by Proyectos de
Autopistas Privadas, S. A. de C. V. y Aldesa Holding, S. A. de C. V. (which participates with
Construcciones Aldesem, S. A. de C. V., Concesiones y Mantenimiento Aldesem, S. A. de C. V. y
Desarrolladores de Infraestructura Viares, S. A. de C. V.), won a bid for the construction, operation
and maintenance, for a term of 30 years, of the Jantetelco – El Higuerón highway (Siglo XXI) with a
length of 61.8 kilometers and an investment of $2,887,000 and a grant from the National investment
Fund (Fondo Nacional de Inversión, FONADIN) of approximately $720,000.
The Company is a 51%-partner in the entity Empresa Concesionaria de Autopistas de Morelos, S. A.
de C. V., which is accounted for within the investment in shares of associated companies and joint
ventures line item. On December 18, 2013, Empresa Concesionaria de Autopistas de Morelos, S. A. de
C. V. obtained the concession title and on the same date, the Company made a contribution to the joint
venture of $135,424; during 2014, the Company made contributions of $271,557, for a total
investment of $406,972 (see Note 13).
e.
Participation in Elevated Puebla Bypass concession
On August 18, 2014, the concession for the construction, operation, preservation and maintenance of
the state-run elevated bypass in the Metropolitan zone of Puebla was approved, which will have a
length of 13.3 km and will be built above the federal highway between Mexico City and Puebla (from
km 115+000 to km128+300) (the “Puebla Elevated Bypass Concession”). The concession was granted
to Autovías Concesionadas OHL, S. A. de C. V. (“Autovías Concesionadas OHL”), with a total
investment of $10,000,000, of which the Puebla State Government will contribute $5,000,000, for a
30-year term once operations begin, which is estimated to occur in two years.
On August 18, 2014, the Company and OHL México, S. A. B. de C. V. (“OHL México”) created an
two entities, Libramiento Elevado de Puebla, S.A. de C.V. and Constructor Libramiento Elevado de
Puebla, S.A. de C.V., whose purpose is to carry out the works under the Puebla Elevated Bypass
Concession.
The Company holds 49% of the common stock of Libramiento Elevado de Puebla, S. A. de C. V. and
of Constructora Libramiento Elevado de Puebla, S. A. de C. V., which is accounted for under the
investment in shares of associated companies and joint ventures line item; as of December 31, 2014 the
Company had contributed the amount of $612,189 to the business. As of December 31, 2014, such
transaction was accounted for as a joint venture (see Note 13).
11
f.
Merger of subsidiaries
On December 31, 2013, at the Extraordinary General Stockholders’ Meeting, the stockholder
approved the merger between Concesionaria Pac, S. A. de C. V. ("Concesionaria Pac", formerly
Concesionaria Monarca, S.A. de C.V., as the merging company) and Concemex, S. A. de C. V. and
Concesionaria Monarca, S. A. de C. V. (merged companies), with Concesionaria Pac remaining as the
surviving entity, which assumed all rights and obligations of the merged companies on January 1,
2014, the legal date of the merger.
This merger was subject to authorization from the following agencies as conditions precedent, which
were obtained as of the date of the issuance of the accompanying consolidated financial statements:
the Secretary of Communications and Transportation of Mexico State; the Commission of Real Estate
and Concessions of Sonora State; parastatal agencies of Puebla’s Toll Roads (“CCP”); the Secretary of
Communications and Transportation of Tlaxcala State; and the Secretary of Communications and
Public Construction of Michoacan State.
This merger did not have any accounting effects in the accompanying consolidated financial
statements.
g.
Formation of subsidiaries
On November 4, 2013, at the Extraordinary General Stockholders’ Meeting, the stockholders approved
the split of Promotora de Autopistas del Pacífico, S. A. de C. V. ("PAPSA"), which legally took effect
on January 1, 2014. As a result, two new entities were formed as part of the corporate restructuring of
the Company and in order to generate efficiencies in the management and control of the concessions
that PAPSA operated as of December 31, 2014. This transaction was subject to the authorization of the
Secretary of Communications and Transportation (“SCT”) and the CCP for the transfer of the
concessions operated by PAPSA. On December 4, 2013, the authorization from CCP was obtained and
on March 26, 2014 the Company obtained the authorization from the SCT.
PAPSA split its assets and liabilities forming the following companies:
1) Vías de Comunicación del Centro y Pacífico, S. A. de C. V., which received the assets and liabilities
realted to the Armería – Manzanillo, Ecatepec – Pirámides and San Martín Texmelucan – Tlaxcala –
El Molinito toll roads and;
2) Vías Concesionadas de Carreteras PAPSA, S. A. de C. V. , which received the assets and liabilities
related to the Vía Atlixcáyotl, Apizaco – Huauchinango and Virreyes – Teziutlán toll roads.
This transaction did not have any accounting effects in the accompanying consolidated financial
statements.
h.
Modification of concession contracts
Peñón - Texcoco - On July 5, 2013, the Company obtained the fourth amendment to the Peñón Texcoco toll road concession, whose concessionaire is Concesionaria Pac, S. A. de C. V. (CPAC,
subsidiary company), which authorized additional construction of improvements or interconnection on
local or federal highways or other investments related to the toll road. The Company may obtain a
compounded annual real rate of return of 10.47% on these investments from tolls, if they are funded
from the surplus revenues of the Peñón – Texcoco highway. According to this amendment, the
approved investments total $115,000 through the date of these consolidated financial statements, for
the repair of a damaged expansion subsection of the Tenango - Ixtapan de la Sal highway in the State
of Mexico. Also, the amendment extended the term of the Peñón - Texcoco concession to up to an
additional 30 years or the time necessary for the concessionaire to recover its investment and
corresponding term, not to exceed the maximum term provided by law which is on March 18, 2053.
12
On March 12, 2014, CPAC obtained the first amendment to the annex attached to the fourth
amendment to the Peñón – Texcoco toll road concession, authorizing the construction of
improvements to strengthen the road infrastructure, for investment amounts of $41,823 and $35,178, in
addition to those authorized in the original amendment.
México-Toluca - On July 23, 2013, the Company was granted with the ninth amendment to the
concession title for the Mexico-Toluca highway, held by Promotora y Administradora de Carreteras,
S. A. de C. V. (PACSA, subsidiary company), which authorized additional investments for the
construction of La Marquesa – Lerma de Villada road for approximately $3,500,000, as well as an
increase in the term of the concession period, not to exceed the maximum period established by the
Federal Highways, Transportation and Bridges Law (“Ley de Caminos, Transportes y Puertos
Federales”), which is through July 31, 2049. The Company may obtain a compound annual real rate of
return of 12% on these investments, from tolls, provided that the existing financial creditors of the
Mexico – Toluca highway are not affected.
i.
Current status of Mexicana de Gestión de Agua, S. A. de C. V. (MGA) concession
A contract, dated December 4, 1996, was executed between MGA, a subsidiary of the Company, and
the Board of Directors of the Municipal Operating Agency for Potable Water, Drains and Sanitation of
Navojoa, Sonora (the “Municipality”), whereby MGA was to provide operational, preservation and
maintenance services related to drinking water as well as the sewage system and the sanitation system
of Navojoa Sonora.
During September 2005, the Municipality filed an administrative legal proceeding to rescind the
aforementioned services contract upon claims of noncompliance. The outcome of the proceeding also
required the immediate delivery of the physical and financial administration of the potable water
public system to the Municipality, including the physical possession of all assets used to render the
services and any accounting, monetary or other rights that form part of the administration of the
potable water system.
MGA filed protection (seeking court relief on constitutional grounds) against the ruling issued, which
ultimately granted relief to MGA and requires the Municipality to provide immediate delivery of the
water service operation. After various legal proceedings, the Municipality has returned wells, operating
equipment and certain real estate subject of the original contract, but has not turned over the entire
operation, in spite of the constant requests made by MGA and the juridical authority requirements. As
a result of the non-compliance by the Municipality with the protection order issued, the seventh district
Judge of Sonora state issued a non-execution incident. The purpose of this is aimed to make the
Municipality comply with the requirements of protection order granted to MGA and return the
operation of water supply systems and waste water treatment plant.
At the date of these consolidated financial statements, Navojoa municipality of Sonora state and the
Company continue to be in the process of negotiating the value of assets to be returned.
3.
Basis of presentation
a.
Explanation for translation into English
The accompanying consolidated financial statements have been translated from Spanish into English
for use outside of Mexico. These consolidated financial statements are presented on the basis of
International Financial Reporting Standards (“IFRS”), as issued by the International Accountng
Standards Board (“IASB”). Certain accounting practices applied by the Company that conform with
IFRS may not conform with accounting principles generally accepted in the country of use.
13
b.
Application of new and revised International Financing Reporting Standards (“IFRSs”) and
interpretations that are mandatorily effective for the current year
In the current year, the Company has applied a number of amendments to IFRSs and new
Interpretations issued by the IASB that are mandatorily effective on or after January 1, 2014.
Amendments to IFRS 10 and IFRS 12
The Company has applied the amendments to IFRS 10 and IFRS 12. The amendments to IFRS 10
define an investment entity and require a reporting entity that meets the definitions of an investment
entity not to consolidate its subsidiaries but instead to measure its subsidiaries at fair value through
profit or loss in its consolidated and separate financial statements.
To qualify as an investment entity, a reporting entity is required to:
•
•
•
Obtain funds from one or more investors for the purpose of providing them with investment
management services.
Commit to its investors that its business purpose is to invest funds solely for returns from
capital appreciation, investment income, or both; and
Measure and evaluate performance of substantially all of its investments on a fair value basis.
Consequential amendments have been made to IFRS 12 to introduce new disclosure requirements for
investment entities
As the Company is not an investment entity (assessed based on the criteria set out in IFRS 10 as of
January 1, 2014), the application of the amendments has had no impact on the disclosure or the
amounts recognized in the Company’s consolidated financial statements.
Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities
The Company has applied the amendments to IAS 32 Offsetting Financial Assets and Financial
Liabilities for the first time in the current year. The amendments to IAS 32 clarify the requirements
relating to the offset of financial assets and financial liabilities. Specifically, the amendments clarify
the meaning of ‘currently has a legally enforceable right of set-off’ and ‘simultaneous realization and
settlement’.
As the Company does not have any financial assets and financial liabilities that qualify for offset, the
application of the amendments has had no impact on the disclosures or on the amounts recognized in
the Company’s consolidated financial statements.
Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets
The Company has applied the amendments to IAS 36 Recoverable Amount Disclosures for NonFinancial Assets for the first time in the current year. The amendments to IAS 36 remove the
requirement to disclose the recoverable amount of a cash-generating unit (CGU) to which goodwill or
other intangible assets with indefinite useful lives had been allocated when there has been no
impairment or reversal of impairment of the related CGU. Furthermore, the amendments introduce
additional disclosure requirements applicable to when the recoverable amount of an asset or a CGU is
measured at fair value less costs of disposal. These new disclosures include the fair value hierarchy,
key assumptions and valuation techniques used which are in line with the disclosure required by IFRS
13 Fair Value Measurements.
The application of these amendments has had no material impact on the disclosures in the Company’s
consolidated financial statements.
14
Amendments to IAS 19 Defined Benefit Plans: Employee Contributions
The amendments to IAS 19 clarify how an entity should account for contributions made by employees
or third parties to defined benefit plans, based on whether those contributions are dependent on the
number of years of service provided by the employee.
For contributions that are independent of the number of years of service, the entity may either
recognize the contributions as a reduction in the service cost in the period in which the related service
is rendered, or to attribute them to the employees’ periods of service using the projected unit credit
method; whereas for contributions that are dependent on the number of years of service, the entity is
required to attribute them to the employees’ periods of service.
The application of these amendments has had no material impact on the disclosures in the Company’s
consolidated financial statements.
Annual Improvements to IFRSs 2010-2012 Cycle
The Annual Improvements to IFRSs 2010-2012 Cycle include a number of amendments to various
IFRSs, which are summarized below.
The amendments to IFRS 8 (i) require an entity to disclose the judgments made by management in
applying the aggregation criteria to operating segments, including a description of the operating
segments aggregated and the economic indicators assessed in determining whether the operating
segments have ‘ similar economic characteristics’; and (ii) clarify that a reconciliation of the total of
the reportable segments’ assets to the entity’s assets should only be provided if the segment assets are
regularly provided to the chief operating decision-maker.
The amendments to the basis for conclusions of IFRS 13 clarify that the issue of IFRS 13 and
consequential amendments to IAS 39 and IFRS 9 did not remove the ability to measure short- term
receivables and payables with no stated interest rate at their invoice amounts without discounting, if
the effect of discounting is immaterial. As the amendments do not contain any effective date, they are
considered to be immediately effective.
The amendments to IAS 24 clarify that a management entity providing key management personnel
services to a reporting entity is a related party of the reporting entity. Consequently, the reporting
entity should disclose as related party transactions the amounts incurred for the service paid or payable
to the management entity for the provision of key management personnel services. However,
disclosure of the components of such compensation is not required.
The application of these amendments did not have a significant impact on the Company’s consolidated
financial statements.
Annual Improvements to IFRSs 2011-2013 Cycle
The Annual Improvements to IFRSs 2011-2013 Cycle include a number of amendments to various
IFRSs, which are summarized below.
The amendments to IFRS 3 clarify that the standard does not apply to the accounting for the formation
of all types of joint arrangement in the financial statements of the joint arrangement itself.
The amendments to IFRS 13 clarify that the scope of the portfolio exception for measuring the fair
value of a group of financial assets and financial liabilities on a net basis includes all contracts that are
within the scope of, and accounted for in accordance with, IAS 39 or IFRS 9, even if those contracts
do not meet the definitions of financial assets or financial liabilities within IAS 32.
The application of these amendments has had no material impact on the disclosures in the Company’s
consolidated financial statements.
15
Amendments to IAS 39 Novation of Derivatives and Continuation of Hedge Accounting
The Company has applied the amendments to IAS 39 Novation of Derivatives and Continuation of
Hedge Accounting for the first time in the current year. The amendments to IAS 39 provide relief from
the requirement to discontinue hedge accounting when a derivative designated as a hedging instrument
is novated under certain circumstances. The amendments also clarify that any change to the fair value
of the derivative designated as a hedging instrument arising from the novation should be included in
the assessment and measurement of hedge effectiveness.
The amendments have been applied retrospectively. As the Company does not have any derivatives
that are subject to novation, the application of these amendments has had no impact on the disclosures
or on the amounts recognized in the Company’s consolidated financial statements.
IFRIC 21 Levies
The Company has applied IFRIC 21 Levies for the first time in the current year. IFRIC 21 addresses
the issue as to when to recognize a liability to pay a levy imposed by a government. The Interpretation
defines a levy, and specifies that the obligating event that gives rise to the liability is the activity that
triggers the payment of the levy, as identified by legislation. The Interpretation provides guidance on
how different levy arrangements should be accounted for, in particular, it clarifies that neither
economic compulsion nor the going concern basis of financial statements preparation implies that an
entity has a present obligation to pay a levy that will be triggered by operating in a future period.
IFRIC 21 has been applied retrospectively. The application of this Interpretation has had no material
impact on the disclosures or on the amounts recognized in the Company’s consolidated financial
statements.
c.
New and revised IFRSs in issue but not yet effective
The Company has not applied the following new and revised IFRSs that have been issued but are not
yet effective:
IFRS 9
IFRS 14
IFRS 15
Amendments to IFRS 11
Amendments to IAS 16 and IAS 38
1
2
3
Financial Instruments3
Regulatory Deferral Accounts1
Revenue from Contracts with Customers1
Accounting for Acquisitions of Interests in Joint Operations2
Clarification of Acceptable Methods of Depreciation and
Amortisation1
Effective for annual periods beginning on or after January 1, 2016, with earlier application permitted.
Effective for annual periods beginning on or after January 1, 2017, with earlier application permitted.
Effective for annual periods beginning on or after January 1, 2018, with earlier application permitted.
IFRS 9 Financial Instruments
IFRS 9 issued in November 2009 introduced new requirements for the classification and measurement
of financial assets. IFRS 9 was subsequently amended in October 2010 to include requirements for the
classification and measurement of financial liabilities and for derecognition and in November 2013 to
include the new requirements for general hedge accounting. Another revised version of IFRS 9 was
issued in July 2014 mainly to include a) impairment requirements for financial assets and b) limited
amendments to the classification and measurement requirements by introducing a ‘fair value through
other comprehensive income’ (FVTOCI) measurement category for certain simple debt instruments.
16
Key requirements of IFRS 9:

All recognized financial assets that are within the scope of IAS 39 Financial Instruments:
Recognition and Measurement are required to be subsequently measured at amortized cost or
fair value. Specifically, debt investments that are held within a business model whose objective
is to collect the contractual cash flows, and that have contractual cash flows that are solely
payments of principal and interest on the principal outstanding are generally measured at
amortized cost at the end of subsequent accounting periods. Debt instruments that are held
within a business model whose objective is achieved both by collecting contractual cash flows
and selling financial assets, and that have contractual terms that give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount
outstanding, are measured at FVTOCI. All other debt investments and equity investments are
measured at their fair value at the end of subsequent accounting periods. In addition, under
IFRS 9, entities may make an irrevocable election to present subsequent changes in the fair
value of an equity investment (that is not held for trading) in other comprehensive income, with
only dividend income generally recognized in net income (loss).

With regard to the measurement of financial liabilities designated as of fair value through profit
or loss, IFRS 9 requires that the amount of change in the fair value of the financial liability that
is attributable to changes in the credit risk of that liability is presented in other comprehensive
income, unless the recognition of the effects of changes in the liability’s credit risk in other
comprehensive income would create or enlarge an accounting mismatch in profit or loss.
Changes in fair value attributable to a financial liability’s credit risk are not subsequently
reclassified to profit or loss. Under IAS 39, the entire amount of the change in the fair value of
the financial liability designated as fair value through profit or loss is presented in profit or loss.

In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model,
as opposed to an incurred credit loss model under IAS 39. The expected credit loss model
requires an entity to account for expected credit losses and changes in those expected credit
losses at each reporting date to reflect changes in credit risk since initial recognition. In other
words, it is no longer necessary for a credit event to have occurred before credit losses are
recognized.

The new general hedge accounting requirements retain the three types of hedge accounting
mechanisms currently available in IAS 39. Under IFRS 9, greater flexibility has been
introduced to the types of transactions eligible for hedge accounting, specifically broadening the
types of instruments that qualify for hedging instruments and the types of risk components of
non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has
been overhauled and replaced with the principle of an ‘economic relationship’. Retrospective
assessment of hedge effectiveness is also no longer required. Enhanced disclosure requirements
about an entity’s risk management activities have also been introduced.
The Company’s management does not consider that the application of these amendments to IAS 9 will
have a significant impact on the Company’s financial assets and financial liabilities.
IFRS 14 Regulatory Deferral Accounts
IFRS 14 specifies the accounting for deferral account balances arising from regulated activities. The
standard is applicable to an entity that recognizes, in its first IFRS financial statements, regulatory
deferral account balances in accordance with its previous accounting framework. The standard permits
entities to continue to use, in its first and subsequent IFRS financial statements, the policies adopted
under its previous accounting framework with respect to regulatory deferral account balances, with
limited changes. In addition, the standard requires the separate presentation of regulatory deferral
account balances in the statement of financial position and to present the movement of those accounts
the statement of profit or loss and other comprehensive income. The standard also requires specific
disclosures to identify the nature of, and risks associated with, the rate regulation that has resulted in
the recognition of regulatory deferral account balances in accordance with this standard.
17
IFRS 15 Revenue from Contracts with Customers
In May 2014, IFRS 15 was issued which establishes a single comprehensive model for entities to use
in accounting for revenue arising from contracts with customers. IFRS 15 will supersede the current
revenue recognition guidance including IAS 18 Revenue, IAS 11 Construction Contracts and the
related Interpretations when it becomes effective.
The core principle of IFRS 15 is that an entity should recognize revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services. Specifically, the Standard
introduces a 5-step approach to revenue recognition:
•
•
•
•
•
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
Under IFRS 15, an entity recognizes revenue when (or as) a performance obligation is satisfied, i.e.
when ‘control’ of the goods or services underlying the particular performance obligation is transferred
to the customer. Far more prescriptive guidance has been added in IFRS 15 to deal with specific
scenarios. Furthermore, extensive disclosures are required by IFRS 15.
The Company’s management anticipates that the application of IFRS 15 in the future may have a
material impact on the amounts reported and disclosures made in the Company’s consolidated
financial statements. However, it is not practicable to provide a reasonable estimate of the effect of
IFRS 15 until the Company performs a detailed review.
Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations
The amendments to IFRS 11 provide guidance on how to account for the acquisition of a joint
operation that constitutes a business as defined in IFRS 3 Business Combinations. Specifically, the
amendments state that the relevant principles on accounting for business combinations in IFRS 3 and
other standards (e.g. IAS 36 Impairment of Assets regarding impairment testing of a cash generating
unit to which goodwill on acquisition of a joint operation has been allocated) should be applied. The
same requirements should be applied to the formation of a joint operation if and only if an existing
business is contributed to the joint operation by one of the parties that participate in the joint operation.
A joint operator is also required to disclose the relevant information required by IFRS 3 and other
standards for business combinations.
The amendments to IFRS 11 apply prospectively for annual periods beginning on or after January 1,
2016.
The Company’s management does not anticipate that the application of these amendments to IFRS 11
will have a material impact on the Company's consolidated financial statements.
Amendments to IAS 16 IAS 38 Clarification of Acceptable Methods of Depreciation and
Amortization
The amendments to IAS 16 prohibit entities from using a revenue-based depreciation method for items
of property, plant and equipment. The amendments to IAS 38 introduce a rebuttable presumption that
revenue is not an appropriate basis for amortization of an intangible asset. This presumption can only
be rebutted in the following two limited circumstances:
a)
when the intangible asset is expressed as a measure of revenue; or
b)
when it can be demonstrated that revenue and consumption of the economic benefits of the
intangible asset are highly correlated.
18
The amendments apply prospectively for annual periods beginning on or after January 1, 2016. The
Company’s management does not anticipate that the application of these amendments to IAS 16 and
IAS 38 will have a material impact on the Company’s consolidated financial statements.
d.
4.
As of December 31, 2013, current liabilities related to assigned collection rights of $994,434 included
$250,375 that represented a long-term obligation, and thus have been reclassified to long-term
assigned collection rights, leaving a current balance of $744,059 as of December 31, 2013, after the
restatement. Such modification is not considered material to the Company as it does not impact any
significant ratios or debt covenants.
Summary of significant accounting policies
a.
Statement of compliance
The consolidated financial statements have been prepared in accordance with IFRs as issued by the
IASB.
b.
Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for certain
financial instruments that are measured at fair values at the end of each reporting period, as explained
in the accounting policies below.
i.
Historical cost
Historical cost is generally based on the fair value of the consideration given in exchange for
goods and services.
ii.
Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date, regardless of whether
that price is directly observable or estimated using another valuation technique. In estimating
the fair value of an asset or a liability, the Company takes into account the characteristics of the
asset or liability if market participants would take those characteristics into account when
pricing the asset or liability at the measurement date. Fair value for measurement and/or
disclosure purposes in these consolidated financial statements is determined on such a basis,
except for share-based payment transactions that are within the scope of IFRS 2, leasing
transactions that are within the scope of IAS 17, and measurements that have some similarities
to fair value but are not fair value, such as net realizable value in IAS 2 or value in use in IAS
36.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or
3 based on the degree to which the inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurement in its entirety, which are described as follows:



Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities
that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable
for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
19
c.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Promotora y
Operadora de Infraestructura, S. A. B. de C. V. and its subsidiaries over which it exercise control.
Control is achieved when the Company:



Has power over the investee;
Is exposed, or has rights, to variable returns from its involvement with the investee; and
Has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the
investee when the voting rights are sufficient to give it the practical ability to direct the relevant
activities of the investee unilaterally. The Company considers all relevant facts and circumstances in
assessing whether or not the Company’s voting rights in an investee are sufficient to give it power,
including:




The size of the Company holding of voting rights relative to the size and dispersion of holdings
of the other vote holders;
Potential voting rights held by the Company, other vote holders or other parties;
Rights arising from other contractual arrangements; and
Any additional facts and circumstances that indicate that the Company has, or does not have,
the current ability to direct the relevant activities at the time that decisions need to be made,
including voting patterns at previous stockholders’ meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated statement of income and other
comprehensive income from the date the Company gains control until the date when the Company
ceases to control the subsidiary.
Net income and each component of other comprehensive income are attributed to the owners of the
Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed
to the owners of the Company and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.
Pinfra’s shareholding percentage in the capital stock of its main subsidiaries is shown below:
Construction sector:
Pinfra Sector Construcción,
S. A. de C. V.
Experconstructores Zacatecana,
S. A. de C. V.
Adepay, S. A. de C. V.
Equivent, S. A. de C. V.
Ownership
percentage as of
December 31,
2014
%
Ownership
percentage as of
December 31,
2014 and 2013
%
100
100
Holding company
100
100
100
100
100
100
Holding company
Holding company
General construction
100
100
Holding company
100
100
Production of asphalt mix
100
100
General construction
Activity
Materials sector:
Tribasa Sector Materiales e Insumos
de la Construcción, S. A. de C. V.
(1)
Grupo Corporativo Interestatal,
S. A. de C. V.
Tribasa Construcciones, S. A. de
C. V.
20
21
Ownership
percentage as of
December 31,
2014
%
Ownership
percentage as of
December 31,
2014 and 2013
%
100
100
100
100
100
100
Holding company
Construction, operation and
conservation of highways
Construction, operation and
conservation of highways
100
-
Construction, operation and
conservation of highways
100
-
Concesionaria Pac, S. A. de C. V.
Concemex, S. A. de C. V. (merged
entity)
Concesionaria Monarca, S. A. de
C. V. (merged entity)
Autopista Tenango-Ixtapan de la Sal,
S. A. de C. V.
100
100
-
100
-
100
100
100
Opervite, S. A. de C. V.
Concesionaria Zonalta, S. A. de
C. V.
Infraestructura Portuaria Mexicana,
S.A. de C. V.
100
100
100
100
Construction, operation and
conservation of highways
Construction, operation and
conservation of highways
Construction, operation and
conservation of highways
Construction, operation and
conservation of highways
Construction, operation and
conservation of highways
Concessioned highways
operator
Construction, operation and
conservation of highways
100
100
Ports operator
100
100
Holding company and
leasing property
Concession sector:
Grupo Concesionario de México,
S. A. de C. V.
Promotora y Administradora de
Carreteras, S. A. de C. V.
Promotora de Autopistas del
Pacífico, S. A. de C. V.
Vías Concesionadas de Carretera
Papsa, S. A. de C. V. (PAPSA split
entity)
Vías de Comunicación del Centro y
del Pacífico, S. A. de C. V.
(PAPSA split entity)
Activity
Real property sector:
Tribasa Sector Inmobiliario,
S. A. de C. V.
(1)
As of December 31, 2014 and 2013, Tribasa Sector Materiales e Insumos de la Construcción,
S. A. de C. V. owns 77.75% of the common stock of Mexicana de Cales, S. A. de C. V. which
comprises the noncontrolling interest in the consolidated statements of financial position and
consolidated statements of income and other comprehensive income.
In addition to the above, the Company consolidates certain trusts over which it has determined it
exercises control.
Significant intercompany balances and transactions have been eliminated in these consolidated
financial statements.
Investment in associated companies and joint ventures is accounted for using the equity method. The
Company’s foreign subsidiaries comprise its investments in concessions in Chile and Ecuador, which
are in the process of liquidation and are presented as discontinued operations.
1.
Changes in the Company’s ownership interests in existing subsidiaries
Changes in the Company’s ownership interests in subsidiaries that do not result in the Company
losing control over the subsidiaries are accounted for as equity transactions. The carrying
amounts of the Company’s interests and the non-controlling interests are adjusted to reflect the
changes in their relative interests in the subsidiaries. Any difference between the amount by
which the non-controlling interests are adjusted and the fair value of the consideration paid or
received is recognized directly in equity and attributed to owners of the Company.
22
When the Company loses control of a subsidiary, a gain or loss is recognized in profit or loss
and is calculated as the difference between (i) the aggregate of the fair value of the
consideration received and the fair value of any retained interest and (ii) the previous carrying
amount of the assets (including goodwill), and liabilities of the subsidiary and any noncontrolling interests. All amounts previously recognized in other comprehensive income in
relation to that subsidiary are accounted for as if the Company had directly disposed of the
related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to
another category of equity as specified/permitted by applicable IFRSs). The fair value of any
investment retained in the former subsidiary at the date when control is lost is regarded as the
fair value on initial recognition for subsequent accounting under IAS 39, when applicable, the
cost on initial recognition of an investment in an associate or a joint venture.
d.
Cash and cash equivalents - Cash consists mainly of bank deposits in checking accounts. Cash
equivalents are short-term investments, highly liquid and easily convertible into cash, maturing within
three months as of their acquisition date, and which are subject to insignificant changes in value. Cash
is stated at nominal value and cash equivalents are valued at fair value.
e.
Restricted trust funds - Represents reserve funds required to ensure payment of principal and interest
of assigned collection rights.
f.
Financial instruments
Financial assets and financial liabilities are recognized when a group entity becomes a party to the
contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognized immediately in profit or loss.
g.
Financial assets
Note 20 describes the categories of financial assets the Company maintains.
Financial assets are classified into the following specified categories: financial assets ‘at fair value
through profit or loss’ (FVTPL), ‘held-to-maturity’ investments, ‘available-for-sale’ (AFS) financial
assets and ‘loans and receivables’. The classification depends on the nature and purpose of the
financial assets and is determined at the time of initial recognition. All regular way purchases or sales
of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or
sales are purchases or sales of financial assets that require delivery of assets within the time frame
established by regulation or convention in the marketplace.
i).
Effective interest method
The effective interest method is a method of calculating the amortized cost of a debt instrument
and of allocating interest income over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash receipts (including all fees and points paid or
received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the debt instrument, or, where appropriate,
a shorter period, to the net carrying amount on initial recognition.
ii).
Financial assets at FVTPL
Financial assets are classified as of FVTPL when the financial asset is either held for trading or
it is designated as of FVTPL.
23
A financial asset is classified as held for trading if:
-
It has been acquired principally for the purpose of selling it in the near term; or
On initial recognition it is part of a portfolio of identified financial instruments that the
Company manages together and has a recent actual pattern of short-term profit-taking; or
It is a derivative that is not designated and effective as a hedging instrument.
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on
remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss
incorporates any dividend or interest earned on the financial asset and is included in profit or
loss. Fair value is determined in the manner described in Note 20.
iii).
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity dates that the Company has the positive intent and ability to hold
to maturity. Subsequent to initial recognition, held-to maturity investments are measured at
amortized cost using the effective interest method less any impairment.
iv).
Financial assets classified as available-for-sale (AFS financial assets)
AFS financial assets are non-derivatives that are either designated as AFS or are not classified
as (a) loans and receivables, (b) held-to-maturity investments or (c) financial assets at fair value
through profit or loss.
v).
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Loans and receivables are measured at amortized cost
using the effective interest method, less any impairment.
Interest income is recognized by applying the effective interest rate, except for short-term
receivables when the effect of discounting is immaterial.
vi).
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end
of each reporting period. Financial assets are considered to be impaired when there is objective
evidence that, as a result of one or more events that occurred after the initial recognition of the
financial asset, the estimated future cash flows of the investment have been affected.
For all other financial assets, objective evidence of impairment could include:
•
•
•
•
Significant financial difficulty of the issuer or counterparty; or
Breach of contract, such as a default or delinquency in interest or principal payments; or
It becoming probable that the borrower will enter bankruptcy or financial reorganization; or
The disappearance of an active market for that financial asset because of financial
difficulties.
For certain categories of financial assets, such as trade receivables, assets are assessed for
impairment on a collective basis even if they were assessed not to be impaired individually.
Objective evidence of impairment for a portfolio of receivables could include the Company’s
past experience of collecting payments, an increase in the number of delayed payments in the
portfolio past the average credit period of 60 days, as well as observable changes in national or
local economic conditions that correlate with default on receivables.
24
For financial assets carried at amortized cost, the amount of the impairment loss recognized is
the difference between the asset’s carrying amount and the present value of estimated future
cash flows, discounted at the financial asset’s original effective interest rate.
For financial assets that are carried at cost, the amount of the impairment loss is measured as
the difference between the asset’s carrying amount and the present value of the estimated future
cash flows discounted at the current market rate of return for a similar financial asset. Such
impairment loss will not be reversed in subsequent periods.
The carrying amount of the financial asset is reduced by the impairment loss directly for all
financial assets with the exception of trade receivables, where the carrying amount is reduced
through the use of an allowance account. When a trade receivable is considered uncollectible, it
is written off against the allowance account. Subsequent recoveries of amounts previously
written off are credited against the allowance account. Changes in the carrying amount of the
allowance account are recognized in profit or loss.
For financial assets measured at amortized cost, if, in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event occurring
after the impairment was recognized, the previously recognized impairment loss is reversed
through profit or loss to the extent that the carrying amount of the investment at the date the
impairment is reversed does not exceed what the amortized cost would have been had the
impairment not been recognized.
vii).
Derecognition of financial assets
The Company derecognizes a financial asset only when the contractual rights to the cash flows
from the asset expire, or when it transfer the financial asset and substantially all the risks and
rewards inherent to the ownership to another entity. If the Company neither transfers nor
retains substantially all the risks and rewards of ownership and continues to control the
transferred asset, it recognizes its retained interest in the asset and an associated liability for
amounts it may have to pay. If the Company retains substantially all the risks and rewards of
ownership of a transferred financial asset, it continues to recognize the financial asset and also
recognizes a collateralized borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable and the cumulative gain or
loss that had been recognized in other comprehensive income and accumulated in equity is
recognized in profit or loss.
h.
Inventories
Inventories are stated at the lower of cost and net realizable value and are mainly asphaltic concrete
and basaltic aggregates such as gravel, sand, seal, hydraulic base ballast, sub-base and tepetate.
i.
Real estate held for future use i)
During 2009, the Company paid an advance for the purchase of land where real estate housing
projects will be developed in the future, which has been classified as long-term and valued at
acquisition cost.
ii)
Real estate participation certificates (CPIs) - These refer to long-term credit instruments which
entitle the Company to a fractional part of the ownership of the territorial reserves contributed
to a trust for purposes of the respective sale. They are recorded at the lower of acquisition cost
and market value. Gains or losses arising from the sale of the CPIs are recorded in income in
the period of total or partial sale or transfer.
25
j.
Investment in concessions - The Company recognizes its investment in concessions based on
Interpretation No.12 of the International Financial Reporting Interpretations Committee (“IFRIC”),
Service Concession Arrangements for the initial recognition of construction, additions, improvements
and extensions to highways under a concession arrangement. This interpretation provides guidance
regarding accounting for service concessions by private sector operators involved in supplying
infrastructure assets and services to the public sector. IFRIC 12 requires that a service concession be
classified as either an intangible asset, a financial asset or a combination of both.
A financial asset results when an operator constructs or makes improvements to the infrastructure, in
which the operator has an unconditional right to receive a specific amount of cash or other financial
asset during the contract term.
An intangible asset results when the operator constructs or makes improvements and is allowed to
operate the infrastructure for a fixed period after the construction is terminated, in which the future
cash flows of the operator have not been specified, because they may vary depending on the use of the
asset.
This IFRIC establishes that for both the financial asset and the intangible asset, the revenues and costs
related to the construction or the improvements are recognized in revenues during the construction
phase.
The rights paid to the SCT for the concession title are recognized as part of the concession intangible
asset.
The intangible asset recognized in the consolidated statement of financial position is amortized over
the concession period based on the traffic density. The estimated useful life and amortization method
are reviewed at the end of each reporting period and the effect of any change in estimate is recognized
prospectively.
As of December 31, 2014 and 2013, the Company has not recognized financial assets related to its
investment in concessions.
Non-highway concessions are amortized on the straight-line method over the term of the concession.
k.
Machinery and equipment - Machinery and equipment are recorded at acquisition cost less any
subsequent accumulated depreciation. Depreciation of machinery and equipment is calculated
according to the units produced in the year with respect to the total estimated production of the assets
during their useful lives. For the remaining fixed assets, depreciations is calculated using the straightline method based on the component approach and the remaining useful lives of the related assets, as
follows:
Average years
Buildings
Construction machinery and equipment
Vehicles
Office furniture and equipment
25-50
5-10
3-10
4-6
The estimated useful lives, residual values and depreciation methods are reviewed at the end of each
reporting period.
The gain or loss of a sale or retirement of an item of furniture and equipment is calculated as the difference
between the proceeds received from sales and the carrying value of the asset and is recorded in results of the
period.
26
l.
Other assets- Other assets are comprised of long-term guarantee deposits, mainly for letters of credit,
related to the investment in joint ventures of Concesionaria de Autopistas de Michoacán, S. A. de
C. V., Operadora de Autopistas de Michoacán, S. A. P. I. de C. V. y Constructora de Autopistas de
Michoacán, S. A. de C. V. (the Michoacán Package in its entirety) and, as of December 31, 2013, of
Siglo XXI mentioned in Note 2d above.
m.
Impairment of intangible assets and real estate, machinery and equipment - At the end of each
period, the Company reviews the carrying values of its intangible assets and real estate, machinery and
equipment to determine whether there are indicators that these assets have suffered a loss from
impairment. If there is any such indicator, the recoverable amount of the asset is calculated in order to
determine the amount of the loss from impairment (if any). When it is not possible to estimate the
recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash
generating unit to which such asset belongs. When a reasonable and consistent distribution base can
be identified, corporate assets are also assigned to the individual cash generating units, or otherwise are
assigned to the smallest group of cash generating units for which a reasonable and consistent
distribution base can be identified.
The recoverable amount is the higher of the fair value less cost of sales and the value in use. When the
value in use is used, the estimated future cash flows are discounted at to present value, using a pre-tax
discount rate which reflects the current assessment of the market regarding the time-value of money
and the specific risk of the asset for which the estimates of future cash flows have not been adjusted.
If it is estimated that the recoverable amount of an asset (or cash generating unit) is lower than its
carrying value, the carrying value of the asset (or cash generating unit) is reduced to its recoverable
value. Losses from impairment are recognized immediately in the statement of income.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating
unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss
been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss
is recognized immediately in net income.
n.
Investments in associates and joint ventures
An associate is an entity over which the Company has significant influence. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but is not control or
joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing
of control of an arrangement, which exists only when decisions about the relevant activities require
unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are incorporated in these
consolidated financial statements using the equity method of accounting, except when the investment,
or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with
IFRS 5. Under the equity method, an investment in an associate or a joint venture is initially
recognized in the consolidated statement of financial position at cost and adjusted thereafter to
recognize the Company’s share of the profit or loss and other comprehensive income of the associate
or joint venture. When the Company’s share of losses of an associate or a joint venture exceeds the
Company’s interest in that associate or joint venture, the Company discontinues recognizing its share
of further losses. Additional losses are recognized only to the extent that the Company has incurred
legal or constructive obligations or made payments on behalf of the associate or joint venture.
27
An investment in an associate or a joint venture is accounted for using the equity method from the date
on which the investee becomes an associate or a joint venture. On acquisition of the investment in an
associate or a joint venture, any excess of the cost of the investment over the Company’s share of the
net fair value of the identifiable assets and liabilities of the investee is recognized as goodwill, which is
included within the carrying amount of the investment. Any excess of the Company’s share of the net
fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is
recognized immediately in profit or loss in the period in which the investment is acquired.
The requirements of IAS 39 are applied to determine whether it is necessary to recognize any
impairment loss with respect to the Company’s investment in an associate or a joint venture. When
necessary, the entire carrying amount of the investment is tested for impairment in accordance with
IAS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in
use and fair value less costs to sell) with its carrying amount. Any impairment loss recognized forms
part of the carrying amount of the investment. Any reversal of that impairment loss is recognized in
accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently
increases.
The Company discontinues the use of the equity method from the date when the investment ceases to
be an associate or a joint venture, or when the investment is classified as held for sale. When the
Company retains an interest in the former associate or joint venture and the retained interest is a
financial asset, the Company measures the retained interest at fair value at that date and the fair value
is regarded as its fair value on initial recognition in accordance with IAS 39. The difference between
the carrying amount of the associate or joint venture at the date the equity method was discontinued,
and the fair value of any retained interest and any proceeds from disposing of a part interest in the
associate or joint venture is included in the determination of the gain or loss on disposal of the
associate or joint venture. In addition, the Company accounts for all amounts previously recognized in
other comprehensive income in relation to that associate or joint venture on the same basis as would be
required if that associate or joint venture had directly disposed of the related assets or liabilities.
Therefore, if a gain or loss previously recognized in other comprehensive income by that associate or
joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the
Company reclassifies the gain or loss from equity to profit or loss when the equity method is
discontinued.
The Company continues to use the equity method when an investment in an associate becomes an
investment in a joint venture or an investment in a joint venture becomes an investment in an associate.
There is no remeasurement to fair value upon such changes in ownership interests.
When a group entity transacts with an associate or a joint venture of the Company, profits and losses
resulting from the transactions with the associate or joint venture are recognized in the Company’s
consolidated financial statements only to the extent of interests in the associate or joint venture that are
not related to the Company.
o.
Construction contracts
When the outcome of a construction contract can be estimated reliably, revenue and costs are
recognized by reference to the stage of completion of the contract activity at the end of the reporting
period, measured based on the proportion of contract costs incurred for work performed to date relative
to the estimated total contract costs, except where this would not be representative of the stage of
completion. Variations in contract work, claims and incentive payments are included to the extent that
the amount can be measured reliably and its receipt is considered probable.
When the outcome of a construction contract cannot be estimated reliably, contract revenue is
recognized to the extent of contract costs incurred that it is probable will be recoverable. Contract costs
are recognized as expenses in the period in which they are incurred.
When it is probable that total contract costs will exceed total contract revenue, the expected loss is
recognized as an expense immediately.
28
When contract costs incurred to date plus recognized profits less recognized losses exceed progress
billings, the surplus is shown as amounts due from customers for contract work. For contracts where
progress billings exceed contract costs incurred to date plus recognized profits less recognized losses,
the surplus is shown as the amounts due to customers for contract work. Amounts received before the
related work is performed are included in the consolidated statement of financial position, as a liability,
as advances received. Amounts billed for work performed but not yet paid by the customer are
included in the consolidated statement of financial position under trade and other receivables.
p.
Government grants
Government grants are not recognized until there is reasonable assurance that the Company will
comply with the conditions attaching to them and that the grants will be received.
Government grants are presented decreasing the value of the related asset, which is the investment in
concessions.
Government grants are recognized as revenue, offsetting the amortization of the related intangible
concession assets on a systematic basis over their useful lives.
q.
Leasing- Leases are classified as finance leases whenever the terms of the lease transfer substantially
all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
i.
The Company as lessor
Amounts due from lessees under finance leases are recognized as receivables at the amount of
the Company’s net investment in the leases. Finance lease income is allocated to accounting
periods so as to reflect a constant periodic rate of return on the Company’s net investment
outstanding in respect of the leases.
Rental income from operating leases is recognized on a straight-line basis over the term of the
relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are
added to the carrying amount of the leased asset and recognized on a straight-line basis over the
lease term.
ii.
The Company as lessee
Operating lease payments are recognized as an expense on a straight-line basis over the lease
term, except where another systematic basis is more representative of the time pattern in which
economic benefits from the leased asset are consumed. Contingent rentals arising under
operating leases are recognized as an expense in the period in which they are incurred.
r.
Foreign currency transactions - The functional currency of the Company and its subsidiaries is the
Mexican peso. Foreign currency transactions are recorded at the applicable exchange rate in effect at
the transaction date. Monetary assets and liabilities denominated in foreign currency are translated into
Mexican pesos at the applicable exchange rate in effect at the reporting date. Exchange fluctuations are
recorded in the consolidated statements of income and other comprehensive income, except in cases
where capitalization is appropriate.
s.
Borrowing costs- Borrowing costs directly attributable to the acquisition, construction or production of
qualifying assets, which are assets that necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are recognized in profit or loss in the period in which they are incurred.
29
t.
Employee benefits
Employee benefits from termination and retirement
The Company provides a seniority premium to all its employees when they leave (either voluntarily or
are dismissed) and have been employed at the Company at least 15 or when they are dismissed,
regardless of their seniority in the Company. These benefits consist of a lump sum payment of 12
days’ wages for each year worked, calculated using the most recent salary, not to exceed twice the
minimum wage established by law.
The related liability and annual cost of such benefits are recorded as it is accrued and are calculated by
an independent actuary on the basis of formulas defined in the plans using the projected unit credit
method using nominal rates.
Short-term and other long-term employee benefits
A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual
leave and sick leave in the period the related service is rendered at the undiscounted amount of the
benefits expected to be paid in exchange for that service.
Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted
amount of the benefits expected to be paid in exchange for the related service.
Statutory employee profit sharing PTU is recorded in the results of the year in which it is incurred and is presented in operating costs and
operating expenses line items in the consolidated statement of income and other comprehensive
income.
u.
Income taxes - Income tax expense represents the sum of the tax currently payable and deferred tax.
1.
Current tax
Current income tax (ISR) is recognized in the results of the year in which is incurred. Through
December 31, 2013, current income tax was calculated as the higher of ISR and the Business
Flat Tax (“IETU”).
2.
Deferred income tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and
liabilities in the consolidated financial statements and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable
temporary differences. Deferred tax assets are generally recognized for all deductible temporary
differences to the extent that it is probable that taxable profits will be available against which
those deductible temporary differences can be utilized. Such deferred tax assets and liabilities
are not recognized if the temporary difference arises from the initial recognition (other than in a
business combination) of assets and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit. In addition, deferred tax liabilities are not recognized if the
temporary difference arises from the initial recognition of goodwill.
As a consequence of the 2014 Tax Reform, as of December 31, 2013 deferred IETU is no
longer recognized.
Deferred tax liabilities are recognized for taxable temporary differences associated with
investments in subsidiaries and associates, and interests in joint ventures, except where the
Company is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments and interests are only
recognized to the extent that it is probable that there will be sufficient taxable profits against
which to utilize the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.
30
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profits will be available
to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the
period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that
have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Company expects, at the end of the reporting period, to
recover or settle the carrying amount of its assets and liabilities.
3.
Current and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that
are recognized in other comprehensive income or directly in equity, in which case, the current
and deferred tax are also recognized in other comprehensive income or directly in equity
respectively. Where current tax or deferred tax arises from the initial accounting for a business
combination, the tax effect is included in the accounting for the business combination.
4.
Tax on assets
The tax on assets (IMPAC) expected to be recoverable is recorded as a tax credit and is
presented in the statement of financial position in the deferred taxes line item.
v.
Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a
result of a past event, it is probable that the Company will be required to settle the obligation, and a
reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the
present obligation at the end of the reporting period, taking into account the risks and uncertainties
surrounding the obligation. When a provision is measured using the cash flows estimated to settle the
present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered
from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement
will be received and the amount of the receivable can be measured reliably.
w.
Construction provision - Corresponds to costs incurred in the construction of highways that have not
yet been billed.
x.
Reserve for major maintenance - The Company creates a provision for major maintenance of highway
sections, based on the estimated cost of the next scheduled major maintenance, determined using
studies prepared by independent experts. This is in accordance with the contractual obligation whereby
at the end of the concession, the related assets will revert to the federal government and must be in
optimal operating condition.
y.
Financial liabilities
i).
Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities
or as equity in accordance with the substance of the contractual agreements and the definitions
of a financial liability and an equity instrument.
31
ii).
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity
after deducting all of its liabilities. Equity instruments issued by a group entity are recognized at
the proceeds received, net of direct issue costs.
Repurchase of the Company’s own equity instruments is recognized and deducted directly in
equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation
of the Company’s own equity instruments.
iii).
Financial liabilities
Financial liabilities are classified as either financial liabilities at ‘fair value through profit and
loss’ or ‘other financial liabilities’.
iv).
Other financial liabilities
Other financial liabilities, including assigned collection rights, are initially valued at fair value,
net of transaction costs. They are subsequently valued at amortized cost using the effective
interest method, recognizing the interest expense on an effective yield basis.
The effective interest method is a method of calculating the amortized cost of a financial
liability and of allocating interest expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash payments through the expected life of the
financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial
recognition.
v).
Derecognition of financial liabilities
The Company derecognizes financial liabilities when, and only when, the Company’s
obligations are discharged, cancelled or they expire. The difference between the carrying
amount of the financial liability derecognized and the consideration paid and payable is
recognized in profit or loss.
z.
Transactions in investment units - Transactions denominated in Investment Units (UDIs) (account
units stipulated in a Mexican decree which establishes that specific obligations which may be
denominated in such units, published in the Federal Official Gazette on April 1, 1995), are recorded at
the applicable exchange rate in effect on the date of the transaction; monetary assets and liabilities
denominated in UDIs are translated into Mexico pesos at the exchange rate in effect at the reporting
date. Fluctuations in values are recorded in results as an exchange rate fluctuation within financing
results, as part of the interest effective method.
aa.
Derivative financial instruments
The Company enters into derivative financial instruments, only if they are used for hedging risk. To
date, the Company has contracted financial instrument swaps to hedge its exposure to fluctuations in
rates related to the financing debt. Note 21 includes further explanation on derivative financial
instruments.
Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and
are subsequently remeasured to their fair value at the end of each reporting period. Fair value is
determined based on recognized market prices and calculations obtained from agents hired by the
Company to assist in valuation. When the derivative is not traded in a market, fair value is based on
valuation techniques accepted in the financial sector. Valuations are conducted quarterly in order to
review changes and impacts on the consolidated financial results.
The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated
and effective as a hedging instrument, in which event the timing of the recognition in profit or loss
depends on the nature of the hedge relationship.
32
A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a
negative fair value is recognized as a financial liability.
Hedge accounting
At the inception of the hedge relationship, the Company documents the relationship between the
hedging instrument and the hedged item, along with its risk management objectives and its strategy for
undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing
basis, the Company documents whether the hedging instrument is highly effective in offsetting
changes in fair values or cash flows of the hedged item attributable to the hedged risk.
When the related transaction complies with all hedge accounting requirements, the derivative is
designated as a hedging instrument when the contract is signed (either as a cash flow hedge a foreign
currency hedge or fair value hedge). The decision to apply hedge accounting depends on economic
conditions or market and economic expectations of national and international markets. When the
Company contracts a derivative financial instrument for hedging purposes from an economic
perspective but that instrument does not meet all requirements established by IFRS to be considered as
hedging instruments, profits or losses of the derivative financial instrument are applied to the results of
the year when they occur.
Effectiveness tests are conducted for the derivatives that qualify as hedging instruments from an
accounting perspective, at least every quarter and every month, if significant changes occur.
Note 22 includes details of the fair value of derivative instruments used for hedging purposes.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash
flow hedges is recognized in other comprehensive income and accumulated under the heading of cash
flow hedging reserve. The gain or loss relating to the ineffective portion is recognized immediately in
profit or loss, and is included in the financing costs line item.
Amounts previously recognized in other comprehensive income and accumulated in equity are
reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line
as the recognized hedged item. However, when the hedged forecast transaction results in the
recognition of a non-financial asset or a non-financial liability, the gains and losses previously
recognized in other comprehensive income and accumulated in equity are transferred from equity and
included in the initial measurement of the cost of the non-financial asset or non-financial liability.
Discontinued hedge accounting
Hedge accounting is discontinued when the Company revokes the hedging relationship, when the
hedging instrument matures or is sold, terminated, or exercised, or when it no longer qualifies for
hedge accounting. Any gain or loss recognized in other comprehensive income and accumulated in
equity at that time remains in equity and is recognized when the forecast transaction is ultimately
recognized in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss
accumulated in equity is recognized immediately in profit or loss.
bb.
Revenue recognition - Toll revenues (concession revenues) are recognized when the service is
rendered. Revenues for the sale of materials are recognized in the period in which the risks and
rewards of ownership of the inventories of materials are transferred to customers, which generally
coincides with the delivery of materials to customers in satisfaction of orders.
Revenues from long-term construction contracts are accounted for using the percentage-of-completion
method; therefore, they are recognized in proportion to the costs incurred in related to total expected
costs of the project. If total costs in the most recent cost estimate exceed total revenues according to
the contract, the expected loss is recognized immediately within in current earnings.
cc.
Earnings per share - Basic earnings per common share are calculated by dividing consolidated net
income of controlling interests by the weighted average number of common shares outstanding during
the year. The Company does not have any potentially dilutive securities, for which reason diluted
earnings per share is the same as basic earnings per share.
33
dd.
5.
Statements of cash flows - The Company presents the consolidated statements of cash flows using the
indirect method. It classifies the concessioned infrastructure construction costs as an investing
activity, because they represent the investment in a right to collect tolls from users. Interest received is
presented within cash flows from operating activities while interest paid is presented within cash flows
from financing activities.
Critical accounting judgments and key sources of estimation uncertainty
In the application of the Company's accounting policies, which are described in Note 4, the Company's
management is required to make judgments, estimates and assumptions about the carrying amounts of assets
and liabilities. The estimates and associated assumptions are based on historical experience and other factors
that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised if the revision affects only that period,
or in the period of the revision and future periods if the revision affects both current and future periods.
a.
Critical judgments in the application of accounting policies
Below are critical judgments, additional to those involving estimates, made by management during the
application of the Company’s accounting policies, and which have a significant effect on the
consolidated financial statements.
-
The Company has assigned collection rights in securitization schemes through trusts and has
determined that it controls and, therefore, consolidates such structured entities. The principal
elements considered by management in its determination of control over the trusts are the
purpose and design of the trusts, in which the Company participated in their creation, such that
a significant portion of the trusts’ activities are conducted on behalf of the Company, as well as
the Company’s exposure and rights to variability of returns from its involvement with the trusts.
Consequently, the Company recognizes the revenues, costs and expenses from the operation of
the highways and the interest generated by the securitization certificates in its results as
revenues from toll roads and operating costs and expenses and interest expense, respectively.
-
The Company’s senior management analyzes the financial performance of the Compnay and
makes decisions regarding the allocation of resources based on its different operating segments,
which are identified based on the exercise of its professional judgment of management. The
operating segments identified are as follows:
Concession - Refers to the operation of concessions comprised of 23 toll road highways (17 of
which are operational and the other five in the construction stage), a bridge, and a multiple use
port terminal. Management constantly evaluates the vehicle flow that occurs and the cash flow
generated, as well as wear and tear and the application of maintenance and preservation of the
highways; in the port operation, management analyzes the conduct of the loading, unloading
and transportation of containers.
Construction - Within the construction segment, the Company renders construction services for
its new infrastructure developments and maintenance services for the concessions which are
fully operational, principally for the Company’s own concessions and in some limited
situations, to third parties.
Plants - Within the plants segment, the Company operates one of the largest asphalt plants in
the metropolitan area of Mexico City, which is used to pave highways and suburban roads
where management assesses the production and sale of tons of asphalt mix, principally.
-
The joint ventures in which the Company participates are companies whose legal form dictates
the separation of the parties involved from the joint business itself. Furthermore, there is no
contractual agreement or any other circumstance to indicate that the parties in the joint ventures
have rights to the assets and obligations derived from the assests and liabilities of the joint
ventures. The Company analyzes the contractual rights to determine that joint control, rather
than control or significant influence, exist. Consequently, such investments are classified as a
joint ventures of the Company rather than as joint operations.
34
-
In accordance with IFRIC 12, the Company analyzes the characteristics of the concession titles
obtained and has determined it appropriate to recognize the investment in concessions as
intangible assets as the concession titles transfer the risks of recovery to the Company, such that
it recovers its investment through the operation of the concessioned highways.
-
On November 20, 2014, the Company entered into an unsecured loan agreement with
Controladora GRC, S. A. de C. V. (“GRC”) for $415,000 (see Note 6). The loan agreement
was solicited by the GRC in order to guarantee its obligations under its own letter of credit
entered into with Banco Interacciones, S. A., (“Banco Interacciones”), in favor of the Federal
Telecommunications Institute (“FTI”). Accordingly, Pinfra agreed to open up an investment
account under its name with Banco Interacciones, the funds of which were deposited there and
could be used by GRC in the instance it needs the funds to make good on its letter of credit with
the FTI. During the time the funds remain unused, the account generates investment income for
Pinfra.
The Company evaluated the presentation of the investment held with Banco Interacciones in
conformity with IAS 39 and concluded that those funds represent an available for sale financial
asset, which are valued at fair value.
b.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future and other key sources of
estimation uncertainty at the end of the reporting period that may have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year.
-
The Company has accumulated recoverable tax losses, whose recoverability must evaluated
before the recognition of a deferred income tax asset, based on future financial projections of
the Company. These calculations have a particular impact on the determination of the portions
of the tax loss carryforwards that are considered recoverable.
-
The Company review the estimate of the useful life and amortization method of its intangible
assets from concessions at the end of each reporting period and the effect of any change in the
estimate is recorded prospectively. Furthermore, at the end of each period, the Company
reviews the carrying values of its tangible and intangible assets in order to determine whether
there is any indicator that they have suffered a loss from impairment.
-
Management makes an estimate to determine and recognize the provision for maintenance
requirements and repair expenses of the concessioned highways, which affects the results of the
periods from the time that the concessioned highways are available for use until the
aforementioned maintenance and/or repair work is performed.
-
Management recognizes a profit margin in the revenues and costs from construction,
improvements and restoration work. The fair value of the services rendered to the
concessionnaire is equivalent to the amount collected by the subcontractor from the Company,
plus a profit margin.
-
The Company performs valuations of its derivative financial instruments classified as cash flow
hedges, which qualify for hedge accounting. Note 21 describes the techniques and valuation
methods of hedge accounting.
-
Some of the assets and liabilities of the Company are measured at fair value in the consolidated
financial statements. The Company determines the techniques and appropriate inputs for the fair
value measurement. When estimating the fair value of an asset or a liability, the Company uses
observable market data as they are available. When the input data at level 1 are not available,
the Company hired an independent qualified appraiser to perform the valuation. The Company
works closely with the independent qualified appraiser to establish the valuation techniques and
appropriate input data for the model.
35
6.
Investments in securities
Financial asset
available for sale
Unrestricted funds
Trading:
Commercial paper
Capital market
Money market
$
Held-to-maturity money market investments
Investments available for sale (1)
Current investments in securities
117,159
88,880
460,028
666,067
6,827,860
7,493,927
Trading:
Money market
Investments in securities - long-term
Total
$
7,493,927
Unrestricted funds
Trading:
Commercial paper
Capital market
Money market
$
Held-to-maturity:
Money markets
Current investments in securities
(1)
44,739
134,338
42,413
221,490
$
$
1,345,594
$
519,020
-
-
415,000
641,143
641,143
$
641,143
519,020
Restricted funds held
in trusts
$
$
519,020
519,020
415,000
415,000
641,143
$
-
Unrestricted funds
held in trusts
1,124,104
1,345,594
Trading:
Money market
Investments in securities - long-term
Total
$
Unrestricted funds
held in trusts
$
987,042
987,042
Restricted funds held
in trusts
$
$
610,411
610,411
$
117,159
88,880
1,589,459
1,795,498
610,411
6,827,860
415,000
9,038,358
407,735
407,735
407,735
407,735
1,018,146
$
9,446,093
Balances as of
December 31, 2013
$
44,739
134,338
1,670,598
1,849,675
987,042
1,124,104
2,973,779
759,634
759,634
759,634
759,634
1,746,676
Balances as of
December 31, 2014
$
3,733,413
On November 20, 2014, the Company entered into an unsecured loan agreement with Controladora
GRC, S. A. de C. V. (“GRC”) for $415,000 that earns interest at the 28-day TIIE + 400 basis points,
payable monthly and maturing on March 31, 2015, with an early redemption option for the full amount
of the loan. The loan agreement was solicited by the GRC in order to guarantee its obligations under its
own letter of credit entered into with Banco Interacciones, S. A., (“Banco Interacciones”), in favor of
the Federal Telecommunications Institute (“FTI”). Accordingly, Pinfra agreed to open up an
investment account under its name with Banco Interacciones, the funds of which were deposited there
and could be used by GRC in the instance it needs the funds to make good on its letter of credit with the
FTI. During the time the funds remain unused, the account generates investment income for Pinfra.
At the same time, on November 20, 2014, Pinfra and GRC entered in a contract whereby GRC pledged
41,500,000 shares of Grupo Radio Centro, S. A. B. de C. V., in order to guarantee GRC’s performance
under the unsecured loan contract, should GRC need to call upon such loan. The shares were deposited
in a brokerage account of Interacciones Casa de Bolsa, S. A. de C. V. as administrator and executor of
the pledge, the Company titleholder of the account, which such pledge will remain until the unsecured
loan has been exercised.
36
The Company has determined that the funds deposited with Banco Intercciones is a financial asset available
for sale. The Company measured the investments at their fair value.
Trust funds are maintained for the purpose of collecting monies generated from toll revenue from
concessions. The restricted trust funds are used to pay the notes mentioned in Note 16 and 17, as well as
interest and other operating expenses of the concessions.
The unrestricted trust funds consist of the following:
2014
Trust No. F/247006 of Concesionaria Pac (formerly
Concesionaria Monarca, S. A. de C. V.) with Banco HSBC
México, S. A. for the purpose of managing revenues
generated by the operation of the Zitácuaro-Lengua de Vaca
concession.
$
2013
4,922
$
26,207
Trust number F/834 of Concesionaria Pacexecuted with Banco
Invex, S. A., for the purpose of fulfilling the investment,
administration and source of payment related to the resources
from the operation of the San Luis- Río Colorado concession
in the State of Sonora.
43,429
26,392
Trust number F/689 of PAPSA executed with Banco Invex, S.
A., for the purpose of fulfilling the investment,
administration and source of payment related to the resources
from the operation of the San Martín Texmelucan - Tlaxcala
-El Molinito concession.
28,361
25,502
Trust number F/178 of Vías de Comunicación del Centro y
Pacífico, S. A, de C. V. (formerly PAPSA) executed with
CIBanco, S. A., for the purpose of fulfilling the investment,
administration and source of payment related to the resources
from the operation of the Ecatepec - Pirámides concession.
44,692
51,134
Trust number F/179 of Vías de Comunicación del Centro y
Pacífico, S. A, de C. V. (formerly PAPSA) executed with
CIBanco, S. A., for the purpose of fulfilling the investment,
administration and source of payment related to the resources
from the operation of the Armería - Manzanillo concession.
201,656
30,205
Trust number F/436 of Vías Concesionadas de Carretera
Papsa, S. A. de C. V. (formerly PAPSA) executed with
CIBanco, S. A., for the purpose of fulfilling the investment,
administration and source of payment related to the resources
from the operation of the Apizaco Huauchinango concession.
39,199
108,999
Trust number F/437 of Vías Concesionadas de Carretera
Papsa, S. A. de C. V. (formerly PAPSA) executed with
CIBanco, S. A., for the purpose of fulfilling the investment,
administration and source of payment related to the resources
from the operation of the Vía Atlixcáyotl concession.
103,953
238,196
Trust number F/438 of Vías Concesionadas de Carretera
Papsa, S. A. de C. V. (formerly PAPSA) executed with
CIBanco, S. A., for the purpose of fulfilling the investment,
administration and source of payment related to the resources
from the operation of the Virreyes Tezihutlan concession.
52,203
133,903
605
605
Other trusts
$
519,020
$
641,143
37
Short and long-term restricted trust funds are integrated as follows:
2014
Trust No. 1344 executed with Banco Inbursa, S. A. Institución
de Banca Múltiple, signed with Concesionaria Pac,
established as part of the issuance of security certificates, and
for the loan and interest payment based on the collection
rights related to the Peñón – Texcoco highway concession.
$
303,859
2013
$
269,212
Irrevocable Administration Trust and Source of Payment No.
1646 of December 11, 2013 signed by Autopista Tenango –
Ixtapan de la Sal, S. A. de C.V. and Pinfra Sector
Construcción, S. A. de C. V., executed with Banco Invex, S.
A., Institución de Banca Múltiple (INVEX) established since
February 17, 2014 as part of the issuance of security
certificates, and for the loan and interest payments based on
the collection rights of the Tenango - Ixtapan de la Sal
highway concession.
62,808
-
Irrevocable Administration Trust and Source of Payment No.
11027448 of October 30, 2005 signed by Autopista Tenango –
Ixtapan de la Sal, S. A. de C.V. and Pinfra Sector
Construcción, S. A. de C. V., executed with Scotiabank
Inverlat, S. A. (Scotiabank) which until August 17, 2014, was
established as part of the issuance of security certificates, and
for the loan and interest payments based on the collection
rights of the Tenango - Ixtapan de la Sal highway concession.
-
69,871
Trust 1486, executed with Banco Inbursa, S. A. de C. V.,
Institución de Banca Múltiple (INBURSA) signed with
Concesionaria Zonalta, S. A. de C.V., established as part of
the issuance of security certificates, and for the loan and
interest payments based on the collection rights of Santa Ana
– Altar highway concession.
74,612
57,988
Trust 574 executed with Banco Invex, S.A. Institución de Banca
Múltiple (INVEX) signed with Concesionaria Pac (before
Concemex, S. A. de C. V.), established as part of the issuance
of security certificates, and for the loan and interest payments
based on the collection rights of Atlixco – Jantetelco highway
concession.
-
55,391
Irrevocable Administration Trust and Source of Payment No.
10232 denominated in Mexican pesos signed by
Experconstructores Zacatecana, S. A. de C. V. executed with
Banco Nacional de Comercio Exterior, S. N. C. established
for the purpose of paying each recognized creditor as required
by the definitive judgment obtained in the Company’s
bankruptcy proceedings.
52,261
51,908
Irrevocable Administration Trust and Source of Payment No.
415 denominated in Mexican pesos signed by
Experconstructores Zacatecana, S. A. de C. V. executed with
CIBanco, S. A. de C. V. established for the purpose of
guaranteeing the CENART payment.
21,534
20,271
38
2014
2013
Trust 178 signed with Vías de Comunicación del Centro y
Pacífico, S. A. de C. V. (formerly PAPSA) executed with
CIBanco, S.A., dedicated to the major maintenance payment
of Ecatepec – Pirámides highway concession.
1,557
1,537
Trust 179 signed with Vías de Comunicación del Centro y
Pacífico, S. A. de C. V. (formerly PAPSA) executed with
CIBanco, S.A., dedicated to the major maintenance payment
of Armeria - Manzanillo highway concession.
1,471
1,452
Trust 689 signed with Vías de Comunicación del Centro y
Pacífico, S. A. de C. V. (formerly PAPSA) executed with
Monex Casa de Bolsa, S. A. de C. V., Monex Grupo
Financiero, dedicated to the major maintenance payment of
San Martín – Texmelucan – Tlaxcala – El Molinito highway
concession.
347
347
Trust 834 signed with Concesionaria Pac executed with Banco
Invex, S. A., dedicated to the major maintenance payment of
San Luis – Río Colorado highway concession in the State of
Sonora.
3,655
3,560
Trust 436 signed with Vías Concesionadas de Carretera Papsa,
S. A. de C. V. executed with CIBanco, S. A., for the purpose
of fulfilling the administration of the resources from the
operation of the Apizaco Huauchinango concession.
18,123
17,680
Trust 437 signed with Vías Concesionadas de Carretera Papsa,
S. A. de C. V. executed with CIBanco, S. A., for the purpose
of fulfilling the administration of the resources from the
operation of the Vía Atlixcáyotl concession.
9,063
8,839
Trust 438 signed with Vías Concesionadas de Carretera Papsa,
S. A. de C. V. executed with CIBanco, S. A., for the purpose
of fulfilling the administration of the resources from the
operation of the Virreyes Teziutlan concession.
8,955
8,839
459,066
1,178,945
835
836
Trust 80481 of PACSA with Nacional Financiera, S. N. C.
Institución de Banca Múltiple (NAFIN), established as part of
the bank loans signed with BBVA Bancomer, S. A.,
Institución de Banca Múltiple and Banco Nacional de Obras y
Servicios Públicos, S. N. C. and before was established as part
of the issuance of security certificates, based on the collection
rights of Mexico – Toluca highway concession.
Other trusts
$
1,018,146
$
1,746,676
39
7.
Accounts receivable
2014
Trade accounts receivable
Unbilled receivables
Recoverable taxes
Sundry debtors
2013
$
260,038
84,859
199,321
31,013
575,231
(54,212)
$
352,338
96,323
116,275
24,306
589,242
(53,333)
$
521,019
$
535,909
Allowance for doubtful accounts
Accounts receivable include amounts that are past due at the end of the period, for which the Company has
recognized an allowance for doubtful accounts, because there is a probability that the Company will not
recover the amounts due or because the amounts have been past due greater than 90 days.
Movement in the allowance for doubtful accounts
2014
2013
Balance at beginning of the year
Amounts recovered during the year
Impairment losses recognized on receivables
$
(53,333)
4,281
(5,700)
$
(137,975)
91,479
(6,837)
Balance at end of the year
$
(54,212)
$
(53,333)
Additionally, trade receivables disclosed above include amounts (see below for aging analysis) that are past
due at the end of the reporting period for which the Company has not recognized an allowance for doubtful
accounts because there has not been a significant change in credit quality and the amounts are still considered
recoverable. The Company does not hold any collateral or other credit enhancements over these balances nor
has the legal right to offset against any amount owed by the Company to the counterparty.
Age of receivables that are past due but not impaired
2014
Past due more than 90 days
$
2013
63,065
Average age (days)
$
138,847
26
26
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of
the trade receivable from the date credit was initially granted up to the end of the reporting period. The
concentration of credit risk is limited due to the fact that the customer base is large and unrelated.
8.
Inventories
2014
(1)
Finished goods
Production in-process (1)
Raw materials (1)
Materials and replacement parts (2)
Goods in transit (1)
$
28,311
288
13,978
50,011
9,574
102,162
(3,768)
$
29,745
214
6,957
46,277
5,846
89,039
(2,965)
$
98,394
$
86,074
Allowance for obsolete inventories
(1)
(2)
2013
Mainly related to specific asfalt and basaltic aggregates such as gravel, sand, seal, ballast, hydraulic
base, sub-base and tepetate.
Mainly composed of parts that the Company uses to service the port terminal of the port of Altamira in
State of Tamaulipas.
40
9.
Long-term notes receivable
Notes receivable are as follows:
2014
Unrelated parties:
Promoairtax, S. A. de C. V.(1)
Servicios Aéreos Estrella, S. A. de C. V.(2)
$
Related parties:
Concesionaria Purépecha, S. A. de C. V. (3)
$
431,217
80,894
-
289,500
$
10.
96,885
44,832
2013
281,467
$
362,361
(1)
Notes receivable for $6,296 thousand US Dollars, earning interest at the London Interbank Offered
Rate ("LIBOR") plus 200 points, payable annually, maturing on December 31, 2021. Interest rates as
of December 31, 2014 and 2013 were 5.83% and 8.44%, respectively.
(2)
On December 3, 2014, the Company acquired a helicopter to subsequently lease it to Servicios Aéreos
Estrella, S. A. de C. V. (the "Leasee") indefinitely agreeing to a fixed minimum monthly payment of
15,000 U.S. dollars which will start once the import requirements are met, including registration with
the Mexican aviation authorities and airworthiness of the Lessee. The minimum lease payments at
December 31, 2014 are: less than a year, 90,000 U.S. dollars (89,086 U.S. dollars at present value);
between one year and five years 720,000 U.S. dollars (659,174 U.S. dollars at present value) and
2,790,000 U.S. dollars (1,835,837 U.S. dollars at present value). During the contract period, the Lessee
shall keep the helicopter in optimum operating conditions and performance.
(3)
Long-term notes receivable earning interest at the 28-day TIIE rate plus three points (6.79% and 7.79%
as of December 31, 2014 and 2013, respectively). Principal will be paid in one exhibition on January
31, 2017.
Real estate held for future use
2014
Land
Real estate participation certificates
2013
$
28,611
77,870
$
26,498
77,870
$
106,481
$
104,368
During 2009, the Company acquired a land where real estate housing projects are developed currently.
On December 2, 2007, Central de Abastos Naucalpan, S. A. de C. V. (CAN) paid, in-kind, the debt it owed to
Concemex, S. A. de C. V. (subsidiary company) at that date, by assigning fiduciary rights to Irrevocable Trust
No. 88 registered by public deed number 16,319, executed on December 2, 2005, for the amount of
27,210,000 CPIs equivalent to $52,862 shown in the statement of financial position, plus 7.86% of the future
rights of such certificates. The rights derived from the CPIs correspond to the ownership of 604,810 square
meters of real estate (trust instrument) located in the municipality of Naucalpan in State of Mexico.
On January 29, 2010, CAN executed a contract to assign an additional portion of its fiduciary rights to
Tribasa Sector Inmobiliario, S. A. de C .V. (TSI), a subsidiary of the Company. In return, TSI paid $25,008
and received 11,112,115 CPIs representing the ownership of 246,994 square meters of land, located in the
municipality of Naucalpan, Mexico State.
On that same date, TSI transferred the fiduciary rights of the 11,112,115 CPIs discussed in the preceding
paragraph to Grupo Corporativo Interestatal, S. A. de C. V. (related party).
41
11.
Property, machinery and equipment
2014
Buildings
Construction machinery and equipment
Vehicles
Office furniture and equipment
$
2013
217,244
768,940
99,037
188,539
1,273,760
Accumulated depreciation
Land
$
217,213
753,932
94,832
55,403
1,121,380
(741,500)
143,073
$
675,333
(687,117)
143,073
$
577,336
Reconciliation of beginning and ending carrying values is as follows:
Balance as of
December 31, 2013
Investment:
Buildings
Construction machinery and
equipment
Vehicles
Office furniture and
equipment
Total investment
$
Accumulated depreciation:
Buildings
Construction machinery and
equipment
Vehicles
Office furniture and
equipment
Total accumulated
depreciation
Land
Net investment
217,213
Additions
$
$
Accumulated depreciation:
Buildings
Construction machinery and
equipment
Vehicles
Office furniture and
equipment
Total accumulated
depreciation
Land
Net investment
-
$
217,244
(29,025)
(6,442)
768,940
99,037
55,403
1,121,380
134,320
189,031
(1,184)
(36,651)
188,539
1,273,760
(101,177)
(8,627)
(475,453)
(72,021)
-
(109,804)
(44,234)
(10,057)
11,150
5,299
(508,537)
(76,779)
(38,466)
(8,776)
862
(46,380)
(687,117)
(71,694)
17,311
(741,500)
-
143,,073
577,336
$
218,962
117,337
$
Additions
$
140
(19,340)
Disposals
$
(1,889)
$
675,333
Balance at
December 31, 2013
$
217,213
705,570
79,981
50,120
16,293
(1,758)
(1,442)
753,932
94,832
51,048
1,055,561
4,355
70,908
(5,089)
55,403
1,121,380
(92,317)
(8,860)
-
(414,036)
(64,057)
(62,557)
(8,340)
(34,160)
(4,306)
(604,570)
(84,063)
143,073
$
$
44,033
10,647
Balance as of
December 31, 2012
Investment:
Buildings
Construction machinery and
equipment
Vehicles
Office furniture and
equipment
Total investment
31
Balance at
December 31, 2014
753,932
94,832
143,073
$
Disposals
594,064
1,140
376
(13,155)
(475,453)
(72,021)
-
(38,466)
1,516
$
(101,177)
(687,117)
$
(3,573)
143,073
$
577,336
42
12.
Investments in concessions
Investments in concessions represent rights, granted by federal and state governments, or another authority,
for a determined period, to construct, establish, operate, and maintain transportation routes in good condition.
The majority of the concessions are granted by the Mexican Federal Government through the SCT under the
federal legislation. Governments of different states in Mexico also grant concessions under the local
legislation for the construction and operation of roads and highways that are usually granted based on a
similar model prepared by the SCT.
Road concessions in México
A road concessionaire constructs or improves roads in order to operate and maintain them in good, working
condition. Concessionaires may transfer their rights and obligations but only with the approval of the
government. Concession terms generally include terms related to the time of delivery, operation and
maintenance works, standards under which the works will be performed, the terms of government
supervision, reserve funds to be maintained for upkeep of the roads, rights to be paid to the government and
toll duties to be charged (including the inflation scope adjustments). The concessionaire shall repair roads any
time it is necessary during the period of the concession. In exchange for constructing, operating and
maintaining the roads in good condition, the concessionaire has the right to retain almost all the income
resulting from the operation of roads during the term of the concession. At the end of the concession, the right
to operate roads and receive income revert back to the government. The road and all repairs made during the
term of the concession remain as property of the government.
From December 1993, the maximum term of a road concession could not exceed 30 years however, based on
the terms of the concession contracts, concessionaires will have the right to request an extension of the term
similar to the original term if such extension is requested during the last fifth part of the original concession
term. In this regard, terms of the concessions generally include the condition that if the traffic exceeded the
volume estimated, the term of the concession would be reduced or the concessionaire would pay a part of
profits resulting from the operation of the road to the government.
The SCT has the right to terminate a concession without any compensation, before the end of the concession
term when certain events occur. The government could also expropriate temporarily all assets related to the
concession in case of war, significant public disturbances, threat to internal peace or for economic or public
reasons. In the case of legal expropriation (except for an international war), the law requests the government
to provide compensation to the concessionaire.
Other infrastructure concessions in Mexico
The Company has investments in other infrastructure concessions which consists of the multipurpose port
terminal II of Altamira, Tamaulipas, to provide handling, storage and custody of foreign and domestic goods
received from trade services, as well as the construction of such infrastructure. These concessions are
controlled in accordance with regulations of federal, municipal or other government agencies. Usually,
concessions are structured in such a way that the concessionaire can recover its investment by retaining the
right to charge fees for periods established in the respective concession contracts.
43
An analysis of the concession projects is as follows:
Concessionaire/
Concession
Expiration of the
concession
Commence-ment
date
Equity percentage
as of
December 31,
2014
Promotora y Administradora de Carreteras, S. A. de C. V.
(PACSA), México - Toluca
Reforma - Constituyentes - Lilas
Reforma – Caborca
Reforma – Chalco
Acopilco
2049
2049
2049
2049
2049
1990
1990
1990
1990
1990
100%
100%
100%
100%
100%
Concesionaria PAC, S. A. de C. V., Peñón - Texcoco
(formerly Concemex, S. A. de C. V.) - Atlixco - Jantetelco
2053
2036
1994
2006
100%
100%
523,045
701,123
511,330
741,375
Autopista Tenango Ixtapan de la Sal, S. A. de C. V. and Pinfra
Sector Construcción, S. A. de C. V.- Ixtapan de la Sal
2036
1995
100%
473,032
475,534
Concesionaria Zonalta, S. A. de C. V., Santa Ana – Altar
2035
2006
100%
985,641
4,863,937
998,257
4,517,380
2039
2009
100%
559,972
561,867
2037
2007
100%
116,410
118,051
2050
2051
2041
1990
1991
2010
100%
100%
100%
1,103,940
854,260
388,828
1,117,274
869,380
400,532
2042
2042
2042
2012
2012
2012
100%
100%
100%
1,547,331
433,429
461,830
5,466,000
1,579,521
443,791
472,994
5,563,410
2036
1996
%
85,258
86,661
2036
2006
100%
788,014
411,245
2053
2049
2049
2049
1994
1990
1990
1990
100%
100%
100%
100%
159,246
870,377
1,708
-
26,164
243,535
382,130
2051
1991
100%
471,177
2,290,522
104,652
1,167,726
Investment balance as of
December 31,
December 31,
2014
2013
Securitized highway concessions:
$
1,008,434
591,325
385,332
59,816
136,189
$
999,879
596,579
61,232
133,194
Non-securitized highway concessions:
Concesionaria Pac, S. A. de C. V.
San Luis - Río Colorado
(formerly Concesionaria Monarca, S. A. de C. V.)
Zitácuaro - Lengua de Vaca
Vías de Comunicación cel Centro y Pacífico, S. A. de C. V.
(formerly PAPSA),
Armería – Manzanillo
Ecatepec – Pirámides
San Martín Texmelucan - Tlaxcala - El Molinito
Vías de Comunicación del Centro y Pacífico, S. A. de C. V.
(formerly PAPSA)
Vía Atlixcáyotl
Virreyes – Tezihutlán
Apizaco - Huauchinango
Other concessions:
Infraestructura Portuaria Mexicana, S. A. de C. V.,
Puerto de Altamira, Tamaulipas
Roads under construction:
Concesionaria Pac, S. A. de C. V. (formerly Concemex,
S. A. de C. V.) Tlaxcala – Xoxtla
Concesionaria Pac, S. A. de C. V. Tenango-Ixtapan de la Sal
PACSA, Tramo 2 Lerma
PACSA, La Venta - Lechería
PACSA, Reforma – Caborca
Vías de Comunicación del Centro y Pacífico, S. A. de C. V.,
Ecatepec – Peñón
$
12,705,717
$
11,335,177
44
The investments the Company has made in concessions as of December 31, are as follows:
2014
Projects in operation and in process
Projects under construction
2013
$
10,415,195
2,290,522
$
10,167,451
1,167,726
$
12,705,717
$
11,335,177
The accrued cost and amortization of finished projects in operation are as follows:
2014
Cost of finished projects in operation and projects in-process
Less:
Accumulated amortization
$
2013
19,524,798
$
(9,109,603)
10,415,195
2,290,522
Projects under construction
$
12,705,717
19,062,143
(8,894,692)
10,167,451
1,167,726
$
11,335,177
Amortization charged to results amounted to $214,911 and $260,102 in 2014 and 2013, respectively.
13.
Investment in shares of associated companies and joint ventures
a.
As of December 31, investments in joint ventures are as follows:
Company
Concesionaria de Autopistas de Michoacán,
S. A. de C. V. (“Paquete Michoacán”) (2)
Concesionaria de Autopistas de Morelos, S. A.
de C. V. (1)
Constructora de Autopistas de Michoacán,
S.A. de C.V.
Libramiento Elevado de Puebla, S. A. de C.
V.(6)
Operadora de Autopistas de Michoacán, S.A.
de C.V.
Concesionaria Purépecha, S. A. de C. V.
“Purepecha” (3)
Posco Mesdc, S. A. de C. V. “Posco”
Construcciones y Drenajes Profundos, S. A.
de C.V.
Opercarreteras, Gpo.Conc.Metropolitano,
Tribasa Cap,Tribasa Colisa, Tribasa Andina
(4) y (5)
Equity
percentage
as of December
31, 2014
25.20%
2014
$
2013
435,975
$
365,943
51%
406,972
135,414
25.20%
24,792
12,522
49%
612,189
-
25.20%
4,454
2,346
50%
22%
30,143
27,601
40,403
27,471
30%
6,607
6,488
50%
37,995
238
1,510,976
(37,995)
Others
Reserved investment (5)
$
1,548,971
37,995
111
552,703
(37,995)
$
590,698
45
(1)
Concesionaria de Autopistas de Morelos, S.A. de C.V. holds a concession for the construction,
operation and maintenance for 30 years of the Jantetelco – El Higuerón highway with a length of 61.8
kilometers. Currently the consortium is in the process of technical and environmental studies, release
of rights of way and other legal procedures in order to commence the project.
(2)
Paquete Michoacán has a concession for the construction and operation, during 30 years, of the
Morelia and Uruapan beltways and the Pátzcuaro-Uruapan-Lázaro Cardenas highway. The entities
which comprise the Paquete Michoacan are Concesionaria de Autopistas de Michoacán, S, A. de C. V.,
Operadora de Autopistas de Michoacán. S. A. P. I. de C. V. and Constructora de Autopistas de
Michoacán, S. A. de C. V. which support the concessionaire with its operation and construction of the
infrastructure included in the concession title, see Note 2d.
(3)
Concesionaria Purépecha, S. A. de C. V. holds the concession to build, operate, use, and maintain the
22.60-kilometer stretch of road (which is of high specifications and state jurisdiction) located between
the federal highway Morelia - Maravatío, vía Charo and the Autopista de Occidente. The concession
contract includes the right to construct upon and use the road and any other assets that comprise it, as
well as provide related auxiliary services.
The term of the concession is 30 years beginning February 13, 2007 and its operation began on June
26, 2008. As control of the entity is shared between the Company and other partners of this
concession, the investment was recorded using the equity method.
(4)
The Company has a 50% investment in Grupo Concesionario Metropolitano, S. A. de C. V., for the
purpose of building and operating the elevated Electric Train Line between Mexico City and the State
of Mexico. The term of the concession is to end in 2013. However, the construction of the Electric
Train Line has not begun yet for reasons beyond the control of the Company. Given the uncertainty
that this project will be completed, the Company has recorded a reserve for the impairment of the
investment.
(5)
Investments in which the Company is engaged in Grupo Concesionario Metropolitano, S. A. de C. V.
were reserved in 2013 due to the unviability of the projects for which they were created.
(6)
On August 18, 2014 and on November 26, 2014, Libramiento Elevado de Puebla, S. A. de C. V., and
as part of the same project, Constructora Lirbamiento Elevado de Puebla, S. A. de C. V., were
constituted, respectively, both for the construction, operation, conservation and maintenance of the
elevated bypass with local jurisdiction on the Mexico-Puebla Federal Highway from km 115 to km 128
+ 300 in the metropolitan area of Puebla. The term of the concession is 30 years from initiating
operations, which is expected to happen in two years.
The Company has signed an agreement with OHL México in order to establish the terms and
conditions for the development of the project, in which the Company participates with 49% and OHL
Mexico with 51%, maintaining joint control over the investment.
This joint venture is accounted for using the equity method in these consolidated financial statements.
b.
A summary of information regarding the joint venture of the Company are detailed below.
2014
2013
Concesionaria de Autopistas de Michoacán, S. A. de C. V.
Total assets
$
6,268,989
$
2,871,034
Total liabilities
$
4,538,931
$
1,418,881
46
2014
2013
Net income for the year
$
277,904
$
303,861
Share of profit of associates and joint ventures
$
70,032
$
76,573
Total assets
$
1,593,886
$
662,682
Total liabilities
$
1,495,505
$
612,990
Net income for the year
$
48,690
$
46,594
Share of profit of associates and joint ventures
$
12,270
$
11,742
Total assets
$
76,715
$
104,149
Total liabilities
$
59,041
$
94,838
Net income
$
8,362
$
5,808
Share of profit of associates and joint ventures
$
2,107
$
1,464
Total assets
$
828,316
$
-
Total liabilities
$
30,332
$
-
Net income
$
-
$
-
Share of profit of associates and joint ventures
$
-
$
-
Constructora de Autopistas de Michoacán, S. A. de C. V.
Operadora de Autopistas de Michoacán, S. A. de C. V.
Concesionaria de Autopistas de Morelos, S. A. de C. V.
Libramiento Elevado de Puebla, S. A. de C. V.
Total assets
$
2,280,529
$
-
Total liabilities
$
1,031,163
$
-
Net income
$
-
$
-
Share of profit of associates and joint ventures
$
-
$
-
Concesionaria Purépecha, S. A. de C. V.
Total assets
$
695,581
$
688,919
Total liabilities
$
635,295
$
608,113
Net income
$
(20,519)
$
(19,310)
Share of profit of associates and joint ventures
$
(10,260)
$
(9,655)
47
2014
2013
Posco Mesdc, S. A. de C. V.
Total assets
$
129,165
$
150,662
Total liabilities
$
3,707
$
6,080
Net income
$
621
$
2,358
Share of profit of associates and joint ventures
$
137
$
448
Total assets
$
193,776
$
245,781
Total liabilities
$
171,754
$
224,154
Net income
$
393
$
420
Share of profit of associates and joint ventures
$
118
$
126
Total assets
$
1,207
$
691
Total liabilities
$
262
$
252
Net income
$
490
$
300
Share of profit of associates and joint ventures
$
123
$
76
Construcciones y Drenajes Profundos, S. A. de C. V.
Servicios Operativos PAIM, S. A. de C. V.
14.
Other assets
2014
Guarantee deposits (1)
Prepaid expenses (2)
Deferred expenses
Other assets
$
$
262,104
219,377
11,641
1,197
494,319
2013
$
$
261,168
106,156
44,125
1,726
374,441
(1)
As of December 31, 2014, includes $246,560 of the letter of credit for investment in Paquete
Michoacán; also, as of December 31, 2013, is comprised of letters of credit for investments in Paquete
Michoacán and Siglo XXI, for $243,703 and $12,750, respectively. See Note 13.
(2)
Corresponds to advances made to subcontractors for construction which under the construction
contract have not been accrued and can not be associated with estimates for construction, but which
will be capitalized as investments in concession in future periods.
48
15.
Discontinued operations
During 2008, as a result of a restructuring process, the Company’s management decided to discontinue its
operations in Chile and Ecuador, where it had acted as concessionaire. Consequently, the discontinued assets
and liabilities are presented in separate headings in the consolidated financial statements for 2014 and 2013.
Furthermore, as a result of the lawsuit which occurred in the prior years between the subsidiary MGA and the
Board of Directors of the Municipal Operating Agency for Applicable Water, Drains and Sanitation of
Navojoa, Sonora, the Company decided to present the assets and liabilities related to the water and drainage
operation concession of that city as discontinued operations, given the Company’s intention to discontinue
their operations.
Below is the integration of discontinued operations as of and for the years ended December 31, 2014 and
2013:
2014
MGA
Statement of financial
position:
Assets
Liabilities
Statement of income:
Costs
Chile
Ecuador
Total
$
29,969
(10,531)
$
27,094
(27,657)
$
-
$
57,063
(38,188)
$
19,438
$
(563)
$
-
$
18,875
$
(1,453)
$
$
-
$
(1,453)
2013
MGA
Statement of financial
position:
Assets
Liabilities
Statement of income:
Costs
16.
Chile
Ecuador
Total
$
29,969
(9,078)
$
27,094
(27,657)
$
-
$
57,063
(36,735)
$
20,891
$
(563)
$
-
$
20,328
$
(1,453)
$
$
-
$
(1,453)
-
Bank loans
As of December 31, 2014, bank loans payable are as follows:
Institution
(1)
Banobras
BBVA Bancomer, S. A. (2)
Interest rate
TIIE plus 1.90
TIIE plus 1.90
2014
$
LessBorrowing costs (3)
Current portion of bank loans
2,872,695
1,436,346
4,309,041
2013
$
(637,140)
(286,242)
$
3,385,659
-
$
-
49
As mentioned in Note 2b, PACSA refinanced its securitized debt, through the Restructuring Agreement with
BANOBRAS and Bancomer, totaling $4,500,000 (historical value).
(1)
(2)
(3)
Preferred Syndicated Loan with BANOBRAS, for a total of $3,000,000 (original historical value).
Preferred Syndicated Loan with Bancomer, for a total of $1,500,000 (original historical value).
Mainly consists of financing fees paid to BANOBRAS of $559,048, financial advisory services to
Tecsar, S. C. of $61,950 and a financing fee commission to BBVA Bancomer of $34,200. These
borrowing costs were accounted net of bank debt; the amortization of the period of borrowing
expenses amounted to $27,723.
Expiration dates of long term portion of these bank loans as of December 31, 2014 are as follows:
2015
2016
2017
2018
Thereafter
$
286,242
22,500
54,000
58,500
3,887,799
$
4,309,041
During the effective term of the bank loans, PACSA must comply with certain affirmative and negative
covenants, of which the most important are as follows:
a.
b.
c.
d.
e.
f.
g.
Fulfill all the legal requirements to which it is subject as a legal entity, derived from its normal
activities.
Pay on the respective date, as established in applicable laws, the respective taxes, fees, contributions,
Social Security fees and government charges.
Obtain and keep the insurance policies current in relation to the project assets, for any and all amounts
required under the respective concession title.
Comply with the debt service coverage ratio whose calculation is established in the Restructuring
Agreement.
Maintain the debt reserve established in the Restructuring Agreement.
Contract and maintain the interest rate hedge as of August 19, 2014 (See Note 21).
PACSA cannot incur additional debt.
As of December 31, 2014, the affirmative covenants and negative covenants had been satisfactorily fulfilled
by PACSA.
17.
Long-term assigned collection rights (securitizations)
Assigned collection rights represent the issuance of security certificates, each of which is held in a specific
trust that refers to a specific concession. The security certificates will be paid by the future transfer of
amounts collected from the operation of related concession.
The integration of the related trusts is a follows:
2014
Assigned collection rights
Issuance costs of security certificates, net
$
Less- short-term assigned collection rights
Long-term assigned collection rights
3,682,866
(213,247)
3,469,619
2013
$
(245,874)
$
3,223,745
9,948,048
(831,679)
9,116,369
(744,059)
$
8,372,310
50
The integration of the related trusts as of December 31, 2014 is as follows:
Issuing trust
a)
Short-term
INBURSA 1344
Long-term
Characteristics of the
Security Certificates
Interest
126,621
710,310
3,055
Public offering of 18,500,000 security
certificates with a face value of one
hundred Mexican pesos per certificate
(historical), payable in 33 semiannual
payments, expiring December 2, 2021 at a
variable rate which is 6.29% and 6.75% as
of December 31, 2014 and 2013,
respectively.
51,067
739,608
2,331
Public offering of 1,580,579 security
certificates with a face value of 100 UDIs
per certificate (historical), payable in 33
semiannual payments beginning on the
date the second installment of interest is
due; the certificate matures on October 4,
2022. The annual fixed interest rate is 5%
on the outstanding balance.
34,167
639,290
2,119
Public offering of 2,117,395 security
certificates with a face value of 100 UDIs
per certificate (historical), which matures on
December 14, 2033 at an annual rate of
5.4% increasing to 5.6% under certain
circumstances.
1,498
358,152
917
Public offering of 846,958 security
certificates with a face value of 100 UDIs
per certificate (historical), which matures
on December 14, 2034 at an annual rate of
5.4% increasing to 5.6% under certain
circumstances.
-
617,799
1,575
Public offering of 1,279,437 security
certificates with a face value of 100 UDIs
per certificate (historical), which matures
on December 14, 2034 at an annual rate of
5.4% increasing to 5.6%, under certain
circumstances. Each time prepayments of
Preferred Series amounts to 5% of the
initial balance, 8% of this Series will
become convertible to Preferred Series.
Peñón - Texcoco
b)
SCOTIABANK 1646
Tenango – Ixtapan de
la Sal
c)
INBURSA 1486
Santa Ana - Altar
d)
INBURSA 1486
Santa Ana - Altar
e)
INBURSA 1486
Santa Ana - Altar
f)
INVEX 574
Atlixco – Jantetelco
32,521
$
245,874
158,586
$
3,223,745
3,337
$
Public offering of 1,438,418 security
certificates with a face value of 100 UDIs
per certificate (historical) which matures
on September 4, 2026 and accrues interest
at an annual fixed rate of 5.83%.
13,334
The integration of the related trusts as of December 31, 2013 is as follows:
Issuing trust
a)
NAFIN 80481
México - Toluca
Short-term
$
471,629
Long-term
$
2,001,703
Interest
$
157,525
Characteristics of the
security certificates
Public offering of 11,137,473 security
certificates with a face value of one hundred
UDIs per certificate (historical), with
expiration maturity date of February 15,
2028. Amounts are payable semiannually,
beginning April 7, 2006, accruing interest at
a 5% annual fixed rate.
51
Issuing trust
b)
Short-term
NAFIN 80481
Long-term
Interest
50,038
1,705,711
-
Public offering of 3,646,559 subordinated
security certificates with a face value of
109.502703 UDIs per certificate
(historical), with a maturity date of
February 15, 2030. Amounts are payable
semiannually beginning April 7, 2006,
accruing interest at an 8.85% annual fixed
rate.
5,938
1,200,757
-
Public offering of 2,415,386 subordinated
securitized certificates, at face value of 100
UDIs each certificate (historical), maturing
on February 15, 2030, with semiannual
payments as of August 15, 2009 at a
variable rate which is 7.94% as of
December 31, 2013, respectively.
110,733
936,651
3,987
Public offering of 18,500,000 security
certificates with a face value of one
hundred Mexican pesos per certificate
(historical), payable in 33 semiannual
payments, expiring December 2, 2021 at a
variable rate which is 6.75% and 7.84% as
of December 31, 2014 and 2013,
respectively.
51,291
745,933
13,265
Public offering of 1,949,812 security
certificates with a face value of 100 UDIs
per certificate (historical), payable in 33
semiannual payments beginning on the
date the second installment of interest is
due; the certificate matures on October 4,
2022. The annual fixed interest rate is
6.75% on the outstanding balance.
31,932
638,250
4,443
1,122
344,086
-
Public offering of 846,958 security
certificates with a face value of 100 UDIs
per certificate (historical), which matures
on December 14, 2034 at an annual rate of
5.4% increasing to 5.6% under certain
circumstances.
561,810
-
Public offering of 1,279,437 security
certificates with a face value of 100 UDIs
per certificate (historical), which matures
on December 14, 2034 at an annual rate of
5.4% increasing to 5.6%, under certain
circumstances. Each time prepayments of
Preferred Series amounts to 5% of the
initial balance, 8% of this Series will
become convertible to Preferred Series.
México - Toluca
c)
NAFIN 80481
México - Toluca
d)
INBURSA 1344
Peñón - Texcoco
e)
SCOTIABANK
11027448
Tenango – Ixtapan de
la Sal
f)
INBURSA 1486
Santa Ana - Altar
g)
INBURSA 1486
Santa Ana - Altar
h)
INBURSA 1486
Santa Ana - Altar
-
Characteristics of the
security certificates
Public offering of 2,117,395 security
certificates with a face value of 100 UDIs
per certificate (historical), which matures on
December 14, 2033 at an annual rate of
5.4% increasing to 5.6% under certain
circumstances.
52
Issuing trust
i)
Short-term
Long-term
INVEX 574
Atlixco – Jantetelco
21,376
$
744,059
237,409
$
8,372,310
Characteristics of the
security certificates
Interest
4,521
$
Public offering of 1,438,418 security
certificates with a face value of 100 UDIs
per certificate (historical), which matures
on September 4, 2026 and accrues interest
at an annual fixed rate of 5.83%.
183,741
Maturity dates of long-term security certificates as of December 31, 2014, are as follows:
2015
2016
2017
2018 and thereafter
a.
$
245,874
391,117
252,901
2,792,974
$
3,682,866
Peñón - Texcoco
On December 17, 2004, Concesionaria Pac, S. A. de C. V., entered into a Management and Payment
Source Irrevocable Trust No. 1344 contract with Banco Inbursa, S. A. The present and future
collection rights related to the toll highway were transferred to the trustee and placed in the trust, in
order to issue 18,500,000 securitization certificates in a public offering at par value of $100 Mexican
pesos per certificate, payable in 33 semiannual payments, and maturing on December 2, 2021,
accruing interest at a variable interest rate which as of December 31, 2014 and 2013 was 6.75% and
7.84%, respectively.
As part of the issuance of the securitization certificates, the Company must maintain a reserve fund
with resources equivalent to one year of debt service (principal and interest) to ensure adequate control
of the trust’s assets, which must remain in effect during the existence of the trust.
b.
Tenango - Ixtapan de la Sal
On October 3, 2005, Autopista Tenango-Ixtapan de la Sal, S. A. de C. V. and Pinfra Sector
Construcción, S. A. de C. V. entered into an amendment agreement to the original trust 11027448 and
a Management and Payment Source Irrevocable Trust contract with Scotiabank Inverlat, S. A.
Institución de Banca Múltiple, Grupo Financiero Scotiabank Inverlat, División Fiduciaria. The present
and future collection rights related to the toll highway were transferred to the trustee and placed in the
trust, as well as all other assets of the original trust, in order to issue unsecured securitization
certificates which given their nature do not have any collateral.
As part of the issuance of the securitization certificates, the Company must maintain a reserve fund
with resources equivalent to one year of debt service (principal and interest) to ensure adequate control
of the trust’s assets, which must remain in effect during the existence of the trust.
As discussed in Note 2c, on February 17, 2014, securitization certificates TENIXCB 14U for the
Tenango - Ixtapan de la Sal highway were issued by Banco Invex, S. A., Institución de Banca
Múltiple, with Invex Grupo Financiero acting as fiduciary of the issuing trust F/1646, Atisa and
Pinseco as trustors and Monex Casa de Bolsa, S. A. de C. V., Monex Grupo Financiero, as common
representative of the holders of the securitization certificates, for 158,057,900 UDIs equivalent to
$813,221; the expenses originated in the issuance were $14,248. This new issue was used to prepay the
prior securitization certificates (TENANCB 05U) in the amount of $814,434, resulting in the
recognition of financial expenses of $14,830. The new issuance accrues interest at a fixed annual
interest rate of 5%. At the same time, the Company liquidated trust 11027448 with Scotiabank
Inverlat, S. A., Institución de Banca Múltiple, Grupo Financiero Scotiabank Inverlat, División
Fiduciaria.
53
On February 13, 2014, the Company extinguished trust 11027448 with Scotiabank Inverlat, S.A.,
Institución de Banca Múltiple, Grupo Financiero Scotiabank Inverlat, División Fiduciaria, paying a
total debt amount of 4,284,345 UDIs, equivalent to $371,219.
c.
Santa Ana – Altar
In 2006, the Company obtained a a concession title for the construction, modernization, operation,
conservation, maintenance and transference of rights with the Sonora State Government to perform the
necessary construction work to modernize the Santa Ana - Altar toll highway, and transfer to the
Company the Altar - Pitiquito highway section. As a result, the Sonora Government transferred the
collection rights of the toll rates on the Santa Ana-Altar highway section to Trust 1486 with Banco
Inbursa, S. A.
Pursuant to the foregoing, 4,235,329 securitization certificates were issued at a value of 100 UDIs
each, for the purpose of financing the construction of the aforementioned highway. The interest is paid
semiannually and the issue will mature in the year 2031; advance payments are permitted based on a
programmed curve.
On August 30, 2006, Concesionaria Zonalta, S.A. de C. V. entered into a Management and Payment
Source Irrevocable Trust 1486 contract with Banco Inbursa, S. A., Institución de Banca Múltiple,
Grupo Financiero Inbursa, División Fiduciaria. The present and future collection rights relatd to the
toll highway, as well as any compensation rights, any right to extend the concession, and the right to
receive any amount or asset fromof the government authorities were transferred to the trustee and
placed in the trust, in order to issue securitization certificates, whose principal source of payment is the
collection rights and the tolls derived from the operation of the highway, which such securitication
certificates do not have specific collateral.
On June 11, 2012, at the General Meeting of Holders of the securitization certificates, the holders
approved the partial prepayment of the securitization certificates (ZonalCB 06U) of Concesionaria
Zonalta, S. A. de C. V. (Zonalta) for $389,900 and the contribution of $10,100 for major maintenance,
leaving a remaining debt balance of $1,616,900. The intention of the aforementioned payment was to
strengthen the Company’s debt profile.
On June 20, 2012, the Technical Committee executed the amendment agreement to Trust No. F/1486
previously authorized by the Department of Communications and Transportation (“SCT”) which, with
the consent of the holders of the securitization certificates and the authorization of the National
Banking and Securities Commission (“CNBV”) issued in official notice number L53-8629-202 dated
June 13, 2012, renewed the inscription of the certificates ZonalCB 06U in the National Registry of
Securities, thereby divididing the original ZonalCB 06U debt certificates into three series with
different characteristics. As part of this restructuring, the Company made an advance payment on June
20, 2012 of 53,900 certificates together with the respective accrued interest. The exchange of the
securitization certificates was performed as follows:
1.
A preferred series for an amount equivalent to 50% of the debt, which was 211,739,500 UDIs
(“Preferred Series”), maturing on December 14, 2033 accruing interest at 5.40%, which may be
gradually increased to 5.60%, if it is not fully paid as of December 14, 2031. Principal will be
paid upon maturity although there is the option of semiannual advance payments. Interest will
be paid semiannually.
2.
A subordinated series (“Subordinated Series”) for an amount equivalent to 20% of the debt,
which was equivalent to 84,695,800 UDIs, accruing interest at 5.4%, up to December 14, 2031;
after that date it will increase gradually to 5.60% until the payment date of the debt, whose
maturity is December 14, 2034. Once the Preferred Series has been fully settled, and if there is
a remnant of resources, the Subordinated Series will be paid in advance, until such remnant is
depleted. The prepayment of the series will be made upon maturity even though there is the
option of making advance payments. Interest will be paid semiannually, if there are sufficient
resources available.
54
3.
A series that is convertible to Preferred Series (“Convertible Series”) for an amount equivalent
to 30% of the debt, which was 127,943,700 UDIs at a real interest rate of 5.40% up to
December 4, 2031; after that date, it will be increased gradually to 5.60% until the payment date
of the debt. Whenever the accrued prepayments of the Preferred Series reach 5% of the initial
balance thereof, 8% of the certificates of the Convertible Series will be converted into Preferred
Series.
The series issued are Series 06U, Series 06-2U and Series 06-3U, respectively.
d.
Atlixco - Jantetelco
On September 15, 2006, Concemex, S. A. de C. V. (merged into Concesionaria Pac) and Región
Central de Autopistas, S. A. de C. V. executed the a Management and Payment Source Irrevocable
Trust No. 574 contract with Banco Invex, S. A. Institución de Banca Múltiple, Invex Grupo
Financiero. The present and future collection right related to the toll highway were transferred to the
trustee and placed in the trust, as well as compensation rights, any right to extend the concessions and
the right to receive any amount or asset from the government authorities, in order to issue
securitization certificates, whose principal source of payment is the collection rights and the tolls
derived from the operation of the highway.
e.
Mexico City - Toluca
On September 19, 2003, the Irrevocable Trust number F/10250 was executed in order to issue
preferred securitization certificates (CONSVEN 03-U) and subordinated securitization certificates
(CONSVEN 03-2U) with Banco Nacional de Comercio Exterior, S. N. C., Institución de Banca de
Desarrollo (BANCOMEXT). The trust contract was entered into by PACSA in its capacity as trustor
and BANCOMEXT in its capacity as trustee. The first beneficiaries are the holders of the preferred
securitization certificates; in second place MBIA; third place, the holders of the subordinated
securitization certificates; in fourth place, the Treasury Department (SHCP); and in fifth place PACSA.
The Company assigned all its present and future collection rights, as well as any compensation from
the government and any other right or asset with regard to the Mexico City-Toluca concessioned
highway to the trust.
BANCOMEXT Trust 10250 was created for the purpose of carrying out the issuance of the preferred
securitization certificates and the subordinated securitized certificates backed by the future toll
revenues from the Mexico City-Toluca concessioned highway. BANCOMEXT Trust 10250 uses the
toll fees, after the payment of value-added tax, operating and maintenance expenses of the highway
and of the Trust itself, for the creation of a reserve account for the benefit of the holders of the
securitization certificates. Once the securitization certificates are covered, the right to receive the
highway toll revenues after the payment of value-added tax, operating and maintenance expenses of
the highway and of the Trust itself, during the remaining term of the concession, but up to 15 business
days before the end of the concession, will belong to the SHCP and to the Company based on the
percentage indicated by the insurance company to the trustee; as of the 16th business day before the end
of the concession, the toll revenues will revert to the Company.
The issues of the preferred securitization certificates had a collateral insurance policy granted by
MBIA Insurance Corporation (MBIA), an insurance company located in New York, USA. The
collateral insurance policy guaranteed the payment of the principal and interest on each payment date
under the terms of such insurance policy to the holders of the preferred securitization certificates. In
the event of noncompliance with the payment of the preferred securitization certificates and
application of the collateral policy, the insurance company was guaranteed to receive the assets held in
the Trust, the shares which Grupo Concesionario de México, S. A. de C. V. holds in PACSA and the
residual rights of the aforementioned trusts; except for such guarantees, there was no additional
liability for the Company.
55
The subordinated securitization certificates did not have an insurance collateral policy like that
described in the preceding paragraph, and their only source of payment is the toll revenues from the
highways held in trust; consequently, if for any reason such assets were insufficient for the trustee to
make all the payments and fulfill the obligations inherent to the trust, neither the trustee, the Company,
the underwriters, or the depositary, would be held liable.
Notwithstanding that discussed in the preceding paragraph, the Company believes that the collection
rights held in trust would be sufficient to cover the amount of principal and interest on such
subordinated securitization certificates.
On April 3, 2006, the Irrevocable Trust No. 80481 contract was entered into freely by NAFIN (Trust
NAFIN 80481). The trust contract was executed by PACSA in its capacity as trustor and by NAFIN in
its capacity as trustee. The first beneficiaries are the holders of the preferred securitization certificates;
in second place, MBIA; in third place, the holders of the subordinated securitized certificates; and in
fourth place, PACSA as holder of the residual certification regarding its right to receive the collection
rights.
On April 7, 2006, a refinancing was performed for the debt related to the preferred and subordinated
securitization certificates which were issued in 2003 through Bancomext Trust 10250; for this purpose,
all collection rights related to the Mexico City-Toluca toll highway, as well as all assets existing in
BANCOMEXT Trust 10250, any collection rights after termination, any government compensation
and any other assets related to the Mexico City-Toluca concessioned highway were transferred from
BANCOMEXT Trust 10250 and contributed to Trust 80481.
Trust NAFIN 80481 was established for the purpose of fulfilling the obligations related to the
preferred securitization certificates and the subordinated securitized certificates, backed by the future
toll revenues from the Mexico City-Toluca concessioned highway.
Trust 80481 issued preferred securitization certificates and subordinated securitization certificates
denominated in UDIs up to an amount equivalent to $5,569,959 (value of the original issue). The new
preferred securitization certificates had a financial collateral insurance policy from MBIA, under terms
substantially similar to those of the financial collateral insurance of the original preferred securitization
certificates in BANCOMEXT Trust 10250.
The resources derived from the offering of the new preferred securitization certificates were used,
among other things, to settle the unpaid balance of the preferred securitization certificates issued by
BANCOMEXT Trust 10250 and the respective issue expenses. The new subordinated securitization
certificates were exchanged for the subordinated securitization certificates issued through the Original
Trust.
On March 19, 2009, a new issue was carried out for subordinated securitization certificates series 2009
Padeim 09-U of the Mexico City-Toluca Highway, for an additional amount of 241,538,600 UDIs,
equivalent as of that date to $1,019,703. This new securitization debt issue was requested by the
Federal Government through the decentralized agency Banco Nacional de Obras y Servicios Públicos,
S. N. C., (BANOBRAS) to finance the additional construction work required in the highway
concession title, in order to: 1) acquire the subordinated securitization certificates which prior to this
new issue were owned by the Sistema de Administración y Enajenación de Bienes (SAE), representing
93.54% of the previously issued subordinated securitization certificates, and 2) obtain additional
resources to finance new construction projects.
The resources obtained were used to pay: a) issue expenses of $161,018, b) a premium to substitute the
SAE of $377,492 and c) other items, mainly value-added tax on issue expenses of $7,148; such
amounts were capitalized under the heading of issue expenses for securitization certificates, at the date
on which the new debt issue was completed.
56
The remainder of the loan was deposited in the account of Trust 80481 in Nacional Financiera, S. N. C.,
(NAFIN), and a fund was established at the same time for new construction projects in the amount of
$469,543, which were used to extend and renew the Mexico City-Toluca Highway, and a fund to cover
possible issue expenses of $4,502. Furthermore, the Company will obtain a release for resources from
this fund semiannually, until the maturity of the issue, which will come from the deposits made for the
collections from the vehicle flows. Such release will depend on a series of variables, whose lower and
upper limits will be 1,489,697 UDIs and 2,340,953 UDIs, respectively. This new issue was in effect up
to February 2030. The trust contract was executed by the Company in its capacity as trustor, with
NAFIN acting as fiduciary and BANOBRAS as beneficiary.
The Trust NAFIN 80481 uses the toll rates, after the payment of value-added tax, ISR, operating and
maintenance expenses of the highway and the Trust itself, for the creation of a reserve fund for the
benefit of the holders of the securitization certificates. Once the securitization certificates are covered,
the right to receive the highway toll revenues after the payment of value-added tax, income tax,
operating and maintenance expenses of the highway and of the Trust itself, during the remaining term
of the concession, but up to 15 business days before the end of the concession, will belong to the
Treasury Department and to PACSA based on the percentage indicated by MBIA to the trustee; as of
the 16th business day before the end of the concession, the toll revenues will revert to PACSA.
On the same date the exchange transaction was carried out for 93.54% of the total of the subordinated
securitization certificates PADEIM 06-2U owned by the Servicio de Administración y Enajenación de
Bienes (SAE) which on March 3, 2010 called an auction for the sale of such instruments on March 17,
2010; Nacional Financiera S.N.C., Institución de Banca de Desarrollo, Dirección Fiduciaria, in its
capacity as trustee of Irrevocable Trust No. 80572, acquired subordinated securitization certificates
(PADEIM 06-2U). To carry out the sale of the subordinated securitization certificates PADEIM 06-2U
NAFINSA, in its capacity as trustee of the Irrevocable Trust No. 80572, contracted a loan with
BANOBRAS for 601,912 UDIs ($2,541,089).
The maturity of this new issue was to mature on February 15, 2030 and accrued interest at a variable
interest rate.
The debt derived from the subordinated securitization certificates PADEIM 09U was guaranteed in the
same way as the debt on the subordinated securitized PADEIM 06-2U with the future collection of the
tolls from the vehicles traveling on the Mexico City-Toluca federal highway, operated by the
Company. The subordinated securitization certificates PADEIM 09U were secured by the vehicle flow
projections for which such securitization certificates were issued.
The debt from these securitization certificates were guaranteed with the future collection of tolls from
the vehicles traveling on the Mexico City-Toluca federal highway, operated by PACSA, until the end
of the concession term which will be in February 2030.
As discussed in Note 2b, the full amount of the securitization certificates PADEIM 06U, PADEIM 062U and PADEIM 09U was prepaid on August 15, 2014. As of December 15, 2014 the Company holds
the contract of Irrevocable Trust NAFIN 80481 whose funds in trust are restricted to the payment of
the bank loans shown in Note 17.
On August 8, 2014, Nacional Financiera, S.N.C. Institución de Banca Mútiple (“NAFIN”), in its
capacity as fiduciary of the trust No. 80572, assigned all its rights and all the obligations to the trust
NAFIN No. 80481 and the latter assumed the payment obligations of principal, interest and other
additional charges of the unsecured subordinated loan dated March 12, 2009 (“Original Credit”),
recognizing that the balance of principal of the unsecured credit at the date of the assignment contract
owed to BANOBRAS is 558,130,767 UDIs.
57
On August 8, 2014, NAFIN, in its capacity as fiduciary of Irrevocable Trust number 80481, PACSA,
BANOBRAS and Bancomer entered into the Restructuring Agreement in the amount of $4,500,000,
which will be comprised of BANOBRAS contributing principal not exceeding the established amount
of $3,000,000, and Bancomer providing an unsecured loan for $1,500,000 payable in quarterly
installments, accruing interest at the TIIE rate plus a previously agreed variable spread ranging from
1.90% to 2.65%, payable quarterly.
The Restructuring Agreement recognizes that the balance of the Original Credit owed to BANOBRAS
as of that date is 558,130,767 UDIs; the parties agreed that as of such date, the Company will pay the
Mexican peso equivalent of 5,381,661 UDIs, together with the interest earned as of August 15, 2014,
for the installment scheduled for such period. Once such payment is made, the unpaid balance of the
Original Credit is 552,749,105 UDIs. BANOBRAS agreed that such balance should be conversted to
its Mexican peso equivalent as of August 15, 2014, and that such amount will form part of the unpaid
balance of the new credit established in the Restructuring Agreement.
Furthermore, in the Restructuring Agreement, the creditors independently agree to grant an increase to
the amount of the credit granted for a total amount of $1,654,510 (three billion Mexican pesos) (the
“Increase”). The primary destination of the resources from the Increase is (i) the advance payment of
the Preferred Securitization Certificates (PADEIM 06U) and (ii) the payment of commissions and
other expenses related to the Restructuring Agreement.
As part of the obligations established in the Restructuring Agreement, on August 8, 2014 the Company
signed a financial derivatives contract to cover its exposure to exchange rate volatility risks. This
hedge covers an initial notional amount equivalent to 50% of the amount granted under the
Restructuring Agreement, over a term of five years.
The source of the resources for the payment of the loan and the payment of interest generated is
exclusively the collection rights and the toll rates from the concessioned highway and other assets and
rights which form part of the assets held in the Trust NAFIN 80481.
The resources obtained from the Restructuring Agreement were used to: (i) prepay the total amount of
the securitization certificates; (ii) pay the commissions, costs, expenses and fees related to the
restructuring of the credit granted, which came to $564,864 plus the respective IVA, whose amount as
of December 31, 2014 is $637,140, which is presented in Note 17; these issue expenses were
accounted for net of the financial debt as of that same date; (iii) finance or refinance investment
permitted in the concession title of PACSA. The amount of unamortized issue expenses as of August
8, 2014 related to the original debt, were $570,730, which were expensed immediately and recorded
under the heading of financial expenses for the year.
18.
Employee benefits
a.
The Company provides a seniority premium which consists of a lump sum payment of 12 days’ wages
for each year worked, calculated using the most recent salary, not to exceed twice the minimum wage
established by law. The related liability and annual cost of such benefits are recorded as it is accrued
and are calculated by an independent actuary on the basis of formulas defined in the plans using the
projected unit credit method.
b.
The Company operates defined benefit plans for eligible employees in its subsidiaries. Under these
plans, employees are entitled to retirement benefits that are between 40% and 45% of final salary upon
reaching retirement age of 65. Other postretirement benefits are not granted.
b.
Net period cost for obligations resulting from the pension plan and seniority premiums was $385 and
$502 in 2014 and 2013, respectively. Other disclosures required under financial reporting standards are
not considered material.
58
19.
Reserve for major maintenance
2014
Beginning
balance
Reserve for major maintenance
$
192,876
Provision
used
Additions
$
192,934
Final
balance
$ (207,298)
$
178,512
2013
Beginning
balance
Reserve for major maintenance
20.
$
111,065
Provision
used
Additions
$
243,107
Final
balance
$ (161,296)
$
192,876
Financial instruments
a.
Significant accounting policies
The details of the significant accounting policies and methods adopted (including the criteria for
recognition, valuation and bases for recognition of revenues and expenses) for each class of financial
asset, financial liability and equity instruments, are disclosed in Note 4.
b.
Management of capital risk
The Company manages its capital to ensure that it will continue as a going concern, while also
maximizing the return to its stockholders through optimization of its capital structure.
The Company's management reviews its capital structure when it presents its financial projections as
part of the business plan to the Company's Board of Directors and stockholders. As part of this review,
the Board of Directors considers the cost of capital and its associated risks. The Company analyzes the
capital structure for each project independently, in order to minimize the risk for the Company and
optimize stockholder returns.
The Company is not subject to any externally imposed capital requirements.
The Company is incorporated as an S. A. B. de C. V. in accordance with the Mexican Securities Law
and the General Companies Law; fixed minimum capital is $50.
c.
Categories of financial instruments
The main categories of financial instruments are as follows:
2014
Financial assets
Cash and cash equivalents
Investments in securities:
Trading investments
Held-to-maturity and available-for-sale investments
Accounts receivable
Financial liabilities
Amortized cost:
Trade accounts payable
Bank loans
Assigned collection rights
Derivative financial instruments
$
346,609
2013
$
110,137
2,203,233
7,242,860
952,236
2,609,309
1,124,104
898,270
95,699
4,309,041
3,469,619
2,315
70,675
9,116,369
-
59
d.
Objectives of financial risk management
The Company's activities are exposed to different economic risks which include (i) market financial
risks (interest rate, foreign currency and pricing), (ii) credit (or credit-related) risk, and (iii) liquidity
risk.
The Company seeks to minimize the potential negative effects of the aforementioned risks in its
financial performance through different strategies. Firstly, the Company seeks to obtain natural hedges
in its operations to cover such risks. When this is not possible or is not economically feasible, the
Company evaluates whether to enter into derivative instruments, unless the risk is considered
insignificant with respect to the Company's financial position, performance and cash flows.
The Company's internal control policy establishes that entering into credit agreements and the risks
involved in the projects carried out by the Company must be jointly analyzed by the representatives of
the finance, legal, administrative and operations area, prior to their authorization. Such analysis also
includes the use of derivative financial instruments to hedge financial risks. The Company’s internal
policy establishes that entering into derivative financial instrument contracts is the responsibility of the
Company's finance and administrative areas, once the aforementioned analysis is concluded.
e.
Market risk
Market risk is the possibility that adverse changes in market rates and prices will give rise to losses.
Management of risk of exposure to UDI
Within the regular course of its operations, the Company is exposed to market risks which are mainly
related to the possibility that changes in the conversion rate of UDIs to pesos will adversely affect the
value of its financial assets and liabilities, its performance or its future cash flows. UDIs are a
conversion factor, which takes into account the effects of inflation. As of December 31, 2014 and
2013, 35% and 89%, respectively, of the Company's debt obligations were denominated in UDIs. This
risk is largely counteracted by the fact that the revenues generated from the concessions are subject to
annual adjustments based on the inflation rate.
The increase in the value of the UDI for the year ended December 31, 2014 and 2013 was 4.18% and
3.78%, respectively. In 2014, if such increase had been 5.18% (i.e., 100 base points above its actual
increase), it would have resulted in a decrease in results and a decrease in stockholders' equity of
approximately $21,666 and $70,432, respectively. If the increase in the value of the UDI had been
3.18%, instead of 2.78% (i.e., 100 base points below its actual increase), it would have resulted in an
increase in results and an increase in stockholders' equity of approximately $21,666 and $70,432,
respectively. The hypothetical increase or decrease in basis points represents a change which
management considers reasonably possible and has been determined as the difference between the
actual change in the value of the UDI and the inflation ceiling which would trigger a renegotiation of
rates.
The aforementioned sensitivity analysis includes the financial instruments outstanding as of the end of
2014 and may not be representative of the risk of change in UDI value during the period due to
changes in the net position denominated in UDIs. Furthermore, as already noted, there is a natural
hedge for this risk with the future revenues from the concessions, which, as they do not represent a
financial instrument in the Company's statement of financial position, are not reflected in the
sensitivity shown.
60
Management of the interest rate risk
Furthermore, the Company is exposed to market risks related to fluctuations in interest rates as some of
its issues of securitized certificates bear interest at variable rates linked to the TIIE. The increase in
such rate would result in a postponement of the expected payment date. As of December 31, 2014 and
2013, the securitized certificates an bank debt issued in relation to one of the Company's highways,
which represented approximately 65% and 11% of it’s the Company’s outstanding debt, accrued
interest at rates linked to the TIIE.
In 2014, an increase (decrease) of 100 base points in the TIIE, which represents management's best
estimate of a reasonably possible change in such interest rate, would result in a decrease (increase) in
the Company's results and stockholders' equity of approximately $19,352 and $10,974, respectively.
The sensitivity analysis includes the financial instruments outstanding as of December 31, 2014, and
may not be representative of the risk of change during the period due to changes in the net position
which bears interest based on the TIIE.
Management of price risk
The Company's financial instruments do not expose it to significant financial risks related to pricing.
Furthermore, the tolls collected by the Company are regulated and adjusted based on the national
consumer price index in Mexico.
Management of exchange risk
In relation to exchange risk, the Company believes that its exposure is immaterial due to the few
transactions and balances denominated in foreign currency and which are listed in Note 23. The
Company contracts its financing in the same currency as the source of its repayment. If the exposure to
this risk were to become significant in a specific period, it would be managed within the parameters of
established policies.
Management of credit risk
Credit risk refers to the risk that the counterparties will default on their contractual obligations,
resulting in a loss for the Company. The Company’s principal credit risk stems from cash and cash
equivalents, investments in securities and accounts and notes receivable.
The Company has a policy of maintaining cash and cash equivalents only with recognized, prestigious
institutions with a high credit rating. Additionally, investments are limited to instruments with high
credit quality. The Company’s principal investments are made through trusts that are consolidated in
the financial statements, and which have strict investment policies that limit credit risk. In the case of
accounts and notes receivable, the credit risk mainly stems from the ports operation and the asphalt
plant, which require credit analyses before the credit is granted, and involve transactions with
companies of high reputation; otherwise, the respective guarantees are obtained in accordance with
established credit policies. Finally, one of the long-term note receivable is with a related party in which
a 50% share is held in that entity’s equity (the investment is shown within the investment in associated
companies line) (see Notes 9 and 13). The other long-term receivable account matures in 2021, is
denominated in dollars and described in Note 9. The third long-term receivable is a finance lease (see
below).
The credit risk on liquid funds and derivative financial instruments is limited because the
counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
61
Collateral held as security and other credit enhancements
The Company does not hold any collateral or other credit enhancements to cover its credit risks
associated with its financial assets, except that the credit risk associated with the finance lease
receivables is mitigated because the finance lease receivables are secured by the leased equipment. The
carrying amount of the finance lease receivables and the fair value of the leased assets is $44,832 as of
December 31, 2014. The Company is not permitted to sell or repledge the collateral in the absence of
default by the lessee.
The highest exposure to credit risk at December 31, 2014 and 2013, is shown in the statements of
financial position.
Management of liquidity risk
Historically, the Company's main sources of liquidity have been (i) cash flows generated from the unsecuritized highway operations, (ii) cash flows generated by the rest of the Company’s operations and
(iii) resources derived from the securitization of the toll collection rights in the securitized highways.
The terms of certain of the securitizations require that all the cash flows generated by the respective
highway above the amount necessary to cover the payments of interest and principal must be applied
to the early repayment of debt. Therefore, as long as any portion of the debt incurred under a
securitized operation remains unpaid, the Company will not receive revenues derived from the toll
rates generated by the highway in question, and will only be entitled to the payment of the
administration and operation fees agreed in the concession contract of such highway. Furthermore, as
all the securitizations represent project risk, if the cash flows generated by such projects were
insufficient to cover the respective debt servicing, there is no recourse against the Company or other
assets different from the securitized ones.
The following table shows the contractual expirations of the Company’s financial liabilities. The table
was determined based on the non-discounted flows according to the first date on which payment may
be required from the Company; however, it does not estimate early repayments due to excess cash
flows from the highways. The table includes payment of principal and interest. Interested was
estimated using the TIIE in effect as of December 31, 2014 and 2013, and the estimated value of the
UDI at each payment period, using an annual inflation increase of 4%.
As of December 31, 2014
Assigned collection rights
Bank loans
Hedge instruments
Trade accounts payable
Total
As of December 31, 2013
Assigned collection rights
Trade accounts payable
Total
1 year
2 to 5 years
6 to 10
years
11 to 15
years
16 to 25
years
Total
$
415,195
350,012
2,315
95,699
$ 1,820,148
1,257,991
-
$ 1,314,632
2,303,703
-
$ 1,648,748
6,023,616
-
$ 3,958,710
618,869
-
$ 9,157,433
10,554,191
2,315
95,699
$
860,906
$ 3,078,139
$ 3,618,335
$ 7,672,364
$ 4,577,579
$19,807,323
1 year
2 to 5 years
6 to 10
years
11 to 15
years
16 to 25
years
Total
$ 1,072,758
70,675
$ 5,075,728
-
$ 7,158,030
-
$ 4,986,060
-
$ 3,987,703
-
$22,280,279
70,675
$ 1,143,433
$ 5,075,728
$ 7,158,030
$ 4,986,060
$ 3,987,703
$22,350,954
62
f.
Fair value of financial instruments
Fair value of financial instruments recorded at amortized cost
Investments in securities held for trading and investments available-for-sale are stated at fair value
which is determined by recognized market prices and when the instruments are not traded in a market,
is determined by technical valuation models recognized in the financial field and are classified as level
2. Additionally, the Company has investments in repurchase agreements in the money market which
are classified as held to maturity. Although they are valued at amortized cost, given the short term
nature and that pay yields generally represent market rates at the time of acquiring the instrument,
management believes that their carrying amounts approximate their fair value. The carrying values of
investments held to maturity are also disclosed in Note 6
Other financial instruments recognized in the financial statements which are not recognized at fair
value include accounts and notes receivable, trade accounts payable, bank loans, assigned collection
rights and financial leasing obligations. Except for the following table, the Company's management
believes that the carrying values of such financial assets and liabilities approximate fair value, given
their nature and short maturity:
Book
value
As of December, 2014
Fair
value
Financial liability:
Assigned collection rights
$
3,682,866
$
7,921,504
Bank loans
$
3,671,901
$
4,309,042
Book
value
As of December, 2013
Fair
value
Financial liability:
Assigned collection rights
$
10,131,789
$
15,308,765
Valuation techniques and assumptions applied to determine fair value
The fair value of the financial assets and liabilities is determined as follows:
21.

The fair value of the financial assets and liabilities with standard terms and conditions, and
negotiated in active liquid markets, are determined based on the prices quoted in the market.

The fair value of the other assets and liabilities is determined in accordance with generally
accepted price determination models, which are based on the analysis of discounted cash flows.

In particular, the fair value of the collection rights assigned was determined through a market
approach, using the listed prices of the Company's securitized certificates and adjusted, if
applicable, for volume factors and level of activity when it is considered that the market is not
active. This valuation is considered Level 3, due to the relevance of the adjustment factors,
which are not observable.
Financial derivative instruments
Financial derivatives hedges- As of December 31, 2014, the Company had $2,250,000 (two billion two
hundred fifty million pesos) outstanding as a notional amount of financial derivatives to cover the exposure to
interest rate risk derived from the financing of the projects. The Company’s policy is not to enter into
derivatives contracts for speculative purposes.
63
The composition of the financial derivatives as of December 31, 2014 includes only instruments which hedge
interest rate fluctuations.
The fair values as of December 31, 2014 of the hedges contracted in accordance with the nature of the
contracts constitute a long-term liability of $2,315.
a.
Financial derivatives, interest rate swaps
To mitigate the risk of interest rate fluctuations, the Company uses financial derivative swaps to fix
variable rates.
The following table shows the financial instruments that cover fluctuations through interest rate swaps
which the company has contracted through its subsidiaries as of this date, which are stated at fair value
determined by a discounted cash flow valuation technique, estimated based on forward interest rates
(from observable yield curves at the end of the reporting period) and contract interest rates, discounted
at a rate that reflects the credit risk of various counterparties and are classified as level 2, of which the
most important details are outlined below:
Notional
amount
Date
Hedge
(thousand of
pesos)
IR- Swap
1,500,000
IR-Swap
750,000
Interest rate
Issue date
Maturity
Aug. 19,
2014
Aug. 19,
2014
Jul. 14,
2019
Jul. 14,
2019
Fair
value
2014
(thousand of
pesos)
Receives
Payment
TIIE 28D (%)
4.94%
$
1,383
4.94%
$
932
TIIE 28D (%)
On August 18, 2014, the Company contracted an interest rate swap in order to modify the payment
profile from variable interest rate to fixed interest rate for the unsecured loan related to this project.
Through the contract, the Company receives the 28 day TIIE rate which it pays on the debt and
undertakes to pay a fixed rate of 4.94%. As of December 31, 2014, this swap is designated as a cash
flow hedge, for which reason the fair value fluctuations are presented in another comprehensive result.
Sensitivity analysis
A sensitivity analysis was performed based on the following interest rate scenarios: +100 base points,
+50 base points, +25 base points, -25 base points, -50 base points, -100 base points. This analysis is
deemed to reflect the potential loss or gain from each financial derivative, depending on the position
held at the close of December 2014, giving a global effect in the instruments portfolio held by the
company, with the aim of reflecting static scenarios which may occur or not.
Fair value as of
December 2014
$
22.
(2,315)
+50 bp
$
+25 bp
34,142
$
-25 bp
16,004
$
-50 bp
(20,793)
$
(39,454)
Stockholders’ equity
a.
Common stock at par value as of December 31, is as follows:
2014
Number of shares
2013
Amount
2014
2013
Fixed capital
Series A
Series L
380,123,523
47,962,835
380,123,523
-
$
719,772
80,340
$
719,772
-
428,086,358
380,123,523
$
800,112
$
719,772
64
Common stock consists of nominative shares without par value and free subscription. Variable capital
may be increased without limitation.
b.
As mentioned in Note 2a, on July 15, 2014, the Company carried out a national and international
public offering in which it issued 42,970,485 Series L shares (without considering the exercise of the
overallotment option) at a placement price of $172 Mexican pesos, per share, through the Mexican
Stock Market. Due to the success of the offering, the overallotment option authorized in the primary
public offering of 6,445,573 Series L shares was exercised, of which 4,992,350 were offered on
different dates at an average price per share of $171.269 Mexican pesos, leaving 1,453,223 shares
subscribed but unpaid, in treasury Accordingly, the entire offer was comprised of a total of 49,416,058
shares (considering the exercise of the overallotment option) at par value of $1.67503826 Mexican
pesos per share, represented by an increase in common stock of $82,774, offset by subscribed, unpaid
capital of $2,434, comprising the unpaid shares held in treasury presented in the statement of changes
in stockholders’ equity. The offer generated a share placement premium of $7,848,175, net of issuance
costs of $317,444..
c.
At a Stockholders’ Ordinary General Meeting held on April 26, 2014, the stockholders approved an
increase in the reserve for the repurchase of stock of $500,000, up to $2,500,000 which represents the
maximum amount of resources available to the Company to repurchase shares representing its own
capital.
d.
Retained earnings include the statutory legal reserve. The General Corporate Law requires that at least
5% of net income of the year be transferred to the legal reserve until the reserve equals 20% of capital
stock at par value (historical pesos). The legal reserve may be capitalized but may not be distributed
unless the entity is dissolved. The legal reserve must be replenished if it is reduced for any reason.
e.
Stockholders’ equity, except for restated paid-in capital and tax retained earnings will be subject to
ISR payable by the Company at the rate in effect upon distribution. Any tax paid on such distribution
maybe credited against annual and estimated ISR of the year in which the tax on dividends is paid and
the following two fiscal years.
Repurchase of shares - In accordance with the Mexican Securities Market Law and the Singular
Circular governing public companies listed on the Mexican Securities Exchange, the Company may
repurchase its own shares in the market, debiting capital stock or other equity accounts.
At a Stockholders’ Ordinary General Meeting held on April 30, 2013, the stockholders approved an
increase in the reserve for the repurchase of stock of $1,076,080, up to $2,000,000 which represents
the maximum amount of resources available to the Company to repurchase shares representing its own
capital.
As of December 31, 2014 and 2013, total repurchased shares were 557,834 and 60,051, respectively.
23.
Foreign currency balances and transactions
a.
The foreign currency monetary position, subject to exchange rate risk, is:
2014
Thousands of U.S. dollars:
Monetary assets
Monetary liabilities
Net monetary asset position
Equivalent in Mexican pesos
$
2013
27,868
(1,885)
34,205
(935)
25,983
33,270
382,855
$
434,680
65
b.
Transactions denominated in foreign currency were as follows:
2014
2013
(In thousands of U.S. dollars)
Import purchases
c.
1,601
Mexican peso to U.S. dollar exchange rates in effect at the dates of the consolidated statements of
financial position and at the date of the related independent auditors’ report were as follows:
2014
U.S. dollar
d.
2013
14.7348
As of March 23, 2015
13.0652
15.2960
Mexican peso to UDI exchange rates in effect at the dates of the consolidated statements of financial
position and at the date of the related independent auditors’ report were as follows:
2014
UDI
24.
1,305
$
5.27.0368
$
2013
As of March 23, 2015
5.051105
$
5.293630
Transactions with related parties
Transactions with related parties, carried out in the ordinary course of business, were as follows:
2014
Income:
Interest income
Operation and maintenance of roads
Administrative services
Costs and expenses:
Other service expenses
25.
$
13,986
26,867
1,560
$
-
2013
$
15,679
25,588
1,560
$
276
Income taxes
The Company is subject to ISR and through December 31, 2013, to ISR and IETU. Therefore, the income tax
payable was the higher between ISR and IETU through 2013.
ISR - The rate was 30% in 2014 and 2013 and as a result of the new 2014 ISR law (“2014 Tax Law”), the rate
will continue at 30% thereafter.
IETU - IETU was eliminated as of 2014; therefore, up to December 31, 2013, this tax was incurred both on
revenues and deductions and certain tax credits based on cash flows from each year. The respective rate was
17.5%. Due to the abolishment of the IETU law, the Entity cancelled in 2013 deferred IETU previously
recorded.
a.
Income taxes expense are as follows:
2014
ISR:
Current tax
Deferred tax
$
IETU:
Current tax
71,507
314,832
2013
$
$
386,339
29,894
98,411
182,648
$
310,953
66
b.
The reconciliation of the statutory and effective ISR rates expressed as a percentage of income before
income taxes is as follows:
2014
2013
30%
30%
2%
2%
Add (deduct) - effects of inflation
(1%)
(1%)
Effect of current IETU
-
Statutory rate
Add the effect of permanent differences, mainly
nondeductible expenses
Estimated valuation of recoverable asset tax and tax
loss carryforwards amortized
Effective rate
c.
7%
(16%)
(26%)
15%
12%
The main items originating a deferred ISR asset are:
2014
Deferred ISR asset:
Effect of tax loss carryforwards
Property, machinery and equipment
Advances from customers
Reserve for major maintenance
Other - Net
Deferred ISR asset
$
857,407
18,075
7,556
76,567
(106,992)
852,613
2013
$
Deferred ISR liability:
Investment in concessions
Prepaid expenses
Deferred ISR liability
(341,091)
(13,454)
(354,545)
(518,949)
(48,156)
(567,105)
Recoverable tax on assets paid
Valuation allowance for tax loss carryforwards
34,500
-
39,800
(179,585)
(139,785)
34,500
Net deferred ISR asset
d.
1,202,617
33,737
17,239
55,800
245,592
1,554,985
$
532,568
$
848,095
The benefits of restated tax loss carryforwards and recoverable IMPAC for which the deferred ISR
asset has been partially recognized, can be recovered subject to certain conditions. In the case of the
concessionaries, according to the Omnibus Tax Ruling in effect since 1994, these can be redeemed up
until the end of the concession. Restated amounts as of December 31, 2014 and expiration dates are:
Year of
Expiration
2015
2016
2017
2019
2020
2021
2022
2023
2050
Tax Loss
carryforwards
$
-
Recoverable
IMPAC
$
33,272
15,171
15,916
7,352
3,703
49,149
4,890
2,728,569
$
2,858,022
1,916
1,639
1,957
28,206
$
33,718
67
26.
27.
Commitments
a.
The Company is obligated to pay the Mexican Federal Government and state governments, as
consideration for the use and operation of the concessioned highways, an amount equal to between
0.5% and 1.5% of the revenues that it earns annually.
b.
The Company has a series of obligations derived from the concession titles for which, in the instance
of noncompliance, the concession titles may be revoked by the authorities.
c.
On March 31, 2009, the Company and the Mexican Federal Government, through SCT, executed a
third amendment agreement to the Ecatepec – Pirámides concession, which grants the Company the
right to construct, operate, use, conserve and maintain a new stretch of highway called Ecatepec Peñón, as an extension to the stretch of highway Ecatepec – Pirámides that links with the Peñón –
Texcoco highway, which is a concession granted to Concesionaria Pac, S. A. C. V., related party. The
estimated investment for this section is $772,497 in accordance with the final design approved by the
Mexican Federal Government, plus $278,000 for award costs incurred. The concession period is 30
years from January 25, 1991. Currently the Company is awaiting the release of the environmental
impact assessment and of the rights-of-way to access the highway, which upon the completion of these
activities, it will be able to begin construction of the highway.
d.
As mentioned in Note 2h, the Company is committed to realize several construction works under the
7th amendment of the concession of the Mexico-Toluca road and under the 4th amendment of the
concession of Peñón - Texcoco.
Contingencies
a.
The Company is engaged in certain lawsuits resulting from normal business activities for $55,345 and
$50,437, as of December 31, 2014 and 2013, respectively. According to its legal advisors, Company
management considers that these lawsuits will be resolved in favor of the Company and therefore will
not have a material, adverse effect on the consolidated financial position of the Company or on the
results of its operations. Consequently, the Company has recorded a liability of $6,816 and $7,046,
respectively, which management considers sufficient to cover existing contingencies.
b.
The Company carries out operations with related parties. Therefore, certain tax differences may arise if
the tax authorities consider that the amounts used by the Company in such transactions are not similar
to those used with or between independent parties in comparable transactions.
c.
With respect to the lawsuit described on Note 2i between Mexicana de Gestión de Agua, S. A. de C. V.
(MGA) and the Operating Board of the Municipal Agency for Potable Water, Drains and Sanitation of
Navojoa, Sonora, management of the Company expects to receive $50,000 for damages and lost profits
as a result of the time elapsed without having complied with the execution of the complaint appeal.
d.
Experconstructores Zacatecana, S. A. de C. V. (formerly Triturados Basálticos y Derivados, S. A. de
C. V.) is involved in an ordinary civil lawsuit filed by Proyectos y Cimentaciones Tacana, S. A. de
C. V. (TACANA) before the First District Court for Civil Matters dated April 6, 2001, in which the
contingency is approximately $70,049 and $62,112 as of December 31, 2014 and 2013, respectively.
However, having entered into a commercial bankruptcy proceeding through a judgment issued on
March 22, 2002, Experconstructores Zacatecana believes that the amounts owed to TACANA were
generated prior to the bankruptcy proceeding. Accordingly, Experconstructores Zacatecana believes
that payments of the amounts should be subject to the bankruptcy proceeding, and more specifically to
the conciliation agreement entered into by Experconstructores Zacatecana with its creditors, in order to
finalize its bankruptcy proceeding. The conciliation agreement was approved by the courts on
December 18, 2003.
68
This agreement stipulated a bankruptcy payment of 5.41% for the total of all bankruptcy creditors
(common creditors). Experconstructores Zacatecana does not believe that the claim filed by TACANA
should contravene the conciliation agreement, which would ultimately be to the detriment of the total
of all bankruptcy creditors. These arguments were made in the lawsuit and will be reviewed in terms of
court relief (appeal) by the Appeals Court against the last enforcement order from any lawsuit which
TACANA might bring in the future. This ruling was made by the Appeals Courts in the appeals
lawsuits filed by TBD. In addition, as of December 31, 2014 and 2013, $52,261 and $51,908,
respectively, is held in trust as restricted funds to cover this lawsuit.
28.
Business segment information
Reportable segments of the Company in accordance with IFRS 8 are based on reports deliverd to the chief
operating decision make to makes decisions regarding the performance of the segments and resource
allocation, based on the following segments.
Information by reportable segment is as follows:
2014
Concession
Construction
Plants
Total
Consolidated net revenues
$
4,702,421
$
1,679,173
$
474,105
$
6,855,699
Gross profit
$
3,305,195
$
274,170
$
112,731
$
3,692,096
Operating income
$
3,348,905
$
369,167
$
90,189
$
3,808,261
Interest expense
$
1,550,914
$
52,223
$
149
$
1,603,286
Interest income
$
(260,323)
$
(6,780)
$
(2,318)
$
(269,421)
Income taxes
$
216,759
$
134,824
$
34,756
$
386,339
Discontinued operations
$
(1,453)
$
$
-
$
Total assets
$
23,804,210
$
2,280,332
$
925,074
$
27,009,616
Acquisitions of fixed assets
$
134,351
$
44,033
$
10,647
$
189,031
Investment in associated
companies
$
1,494,036
$
54,935
$
-
$
1,548,971
Depreciation and
amortization
$
255,113
$
6,207
$
25,285
$
286,605
Total liabilities
$
6,763,851
$
1,294,567
$
147,763
$
8,206,181
2013
Concession
-
Construction
Plants
(1,453)
Total
Consolidated net revenues
$
4,394,076
$
1,017,557
$
410,515
$
5,822,148
Gross profit
$
2,945,428
$
242,841
$
135,477
$
3,323,746
Operating income
$
3,010,400
$
257,008
$
102,181
$
3,369,589
Interest expense
$
1,085,143
$
48,308
$
93
$
1,133,544
Interest income
$
$
(13,117)
$
(165,041)
(4,031)
$
(182,189)
69
2013
Concession
Construction
92,757
Plants
Income taxes
$
185,965
$
Discontinued operations
$
(1,453)
$
Total assets
$
16,256,695
$
Acquisitions of fixed assets
$
36,095
$
Investment in associated
companies
$
590,698
$
Depreciation and
amortization
$
314,852
$
6,521
$
Total liabilities
$
8,954,614
$
906,307
$
-
$
32,231
Total
$
310,953
$
-
$
1,585,412
$
876,240
$
18,718,347
33,365
$
1,448
$
70,908
$
590,698
22,792
$
344,165
116,664
$
9,977,585
-
$
-
(1,453)
The basis of recognition of assets, liabilities and income allocated to each operating segment is the same basis
of the Company’s significant accounting policies as described in Note 4 to the consolidated financial
statements.
29.
Subsequent events
On January 10, 2015, the Company completed the construction and began operating the concession road
Tlaxcala - Puebla which has a length of 17.5 kilometers in the state of Tlaxcala.
30.
Authorization to issue the consolidated financial statements
On March 23, 2015, the issuance of the consolidated financial statements was authorized by Carlos Césarman
Kolteniuk, Finance Director, consequently they do not reflect events that occurred after that date. These
consolidated financial statements are subject to the approval at the Company’s General Ordinary
Stockholders’ Meeting, where they may be modified, based on provisions set forth in Mexican General
Corporate Law.
******
70
EXHIBIT “B”
REPORT OF THE AUDIT COMMITTEE
GA #100224v5
PROMOTORA Y OPERADORA DE INFRAESTRUCTURA, S.A.B.
DE C.V.
Naucalpan, State of Mexico on March 24, 2015.
AUDIT COMMITTEE.
ANNUAL REPORT 2014
To the Board of Directors of
PROMOTORA Y OPERADORA
SUBSIDIARIES.
DE
INFRAESTRUCTURA,
S.A.B.
DE
C.V.
AND
Dear Sirs:
In compliance with article 43 paragraph II of the Securities Market Law, acting as President of
the Audit Committee of Promotora y Operadora de Infraestructura, S.A.B. de C.V. (Pinfra,
S.A.B. de C.V.), I hereby inform you of the activities performed by such Committee during the
period ended on December 31, 2014.
The management of Pinfra, S.A.B. de C.V. has the responsibility of issuing the financial
statements based on the International Financial Reporting Standards, timely prepare the
financial information and implement the internal control systems.
The establishment of the internal control system at Pinfra, S.A.B. de C.V. is responsibility of the
Directorate General. The Audit Committee, as a part of its main function of assisting with the
Board of Directors in the continuous review of the internal controls, issues this report which
contains the period from January 1, 2014 to December 31 of the same year, elaborated based
on the objectives and scope of the guidelines for the implementation of the internal control
system of the company.
In the development of our work, we have considered at all times the recommendations
contained in the Securities Market Law and the Best Corporate Practices Code.
GA #100224v5
The Audit Committee has made its evaluation based on the follow up made through its periodic
meetings, considering the main risks of Pinfra, S.A.B. de C.V. and supported on the results
reported on the files and follow ups of the Internal Auditor, as well as the report of the External
Auditor Deloitte to the financial statements.
Particularly on the subjects of development of methodologies for fraud prevention and forming
risk and control matrices for processes, we have been informed of the advances in the
development of the corresponding activities focused on critical processes.
In regards with the functions of the Audit Committee at Pinfra, S.A.B. de C.V., during this year
the following activities were carried out:
1. The main accounting policies followed by Pinfra, S.A.B. de C.V. were reviewed,
analyzed and approved, in terms of the information received. The Internal Control
System of Pinfra, S.A.B. de C.V. keeps continuing on its implementation based on the
guidelines prepared by the Management and approved by the Board of Directors,
derived from the result of the actions and projects made by the Management, as well as
the works made by the Audit Committee with the support of the External Audit; and
these developments, have assisted in strengthening the capacity of the Company to
positively respond to the surrounding conditions.


By virtue of the above, in accordance to the evaluation performed, the internal control
system keeps operating an advanced construction stage, although there are still pending
processes and aspects that have to be gradually completed before entering a
consolidation stage, which is required to manage at a short term the new challenges and
risks of Pinfra, S.A.B. de C.V.
2. Both the members of the committee as the undersigned, acting as President, assisted to
the corresponding meetings on 2014 listed below:
a)
b)
c)
d)
e)
f)
g)
h)
Thursday February 20.
Thursday March 13.
Thursday April 10.
Thursday May 15.
Thursday July 24.
Thursday September 18.
Thursday October 23.
Thursday December 11.
The matters analyzed, among others, have been the following:


GA #100224v5
Organizational structure analysis.
Detailed review of the 2014 budget presented by the Directorate General to the
Board of Directors.






Discussion of the preliminary and final report of observations to the internal
control, corresponding to the audit of the financial statements up to December
31, 2014.
Analysis of the Transfer Prices Studies filed during the period ended on
December 31 31, 2014 and its repercussion on tax reports.
Tax diagnostic of intercompany operations.
Review of the reporting based on International Financial Reporting Standards
(IFRS).
2014 work plan of internal audit.
Risk Map review.
3. We reviewed the quarterly financial information of the company, corresponding to 2014,
over which, derived from an analysis, we noticed that it showed the real financial
situation of the Company and as such, we suggest its report to the Board of Directors for
their approval. In this regard we also reviewed the compliance to the 2014 budget filed
by the Chief Executive Officer to the Board of Directors.
4. The amount of fees for the external audit of the financial statements for the period of
2014 was reviewed and authorized.


During our interviews and meetings in the Audit Committee with independent auditors,
we corroborated that they met the independence and rotation requirements for their
supervision personnel.

5. The report over the results of the external audit as of December 31, 2014, filed by the
External Auditor of the Company, were reviewed and commented.


We also reviewed with them and with the management of Pinfra, S.A.B. de C.V., their
recommendations over the internal control developed in the intercourse of their work,
and the procedures and scopes of the external audit for the year of 2014.
6. We reviewed the audited financial statements from Deloitte up to December 31, 2014. It
is worth mentioning that such firm issues a clean opinion over such financial statements.


Based on the above, it is suggested to the Board of Directors to approve the Financial
Statements for the period concluded on 2014, to be submitted for the approval of the
Shareholders Meeting.
7. The Committee has been informed by the management and the independent auditors
that the relevant operation with related parties are made to market value, are subject to
analysis by a third party in terms of transfer prices and will be reported, if applicable, in
the relevant tax statements.
GA #100224v5
8. During the period of 2014 the formalization of the agreements of the shareholders’
meetings and the Board of Directors was tracked.

9. The policies and accounting criteria and information followed by the company are
adequate and sufficient, considering the particular circumstances of the same. Said
policies and criteria have been consistently applied on the information filed by the Chief
Executive Officer so I confirm that such information reflects in a reasonable manner the
financial situation and results of Pinfra, S.A.B. de C.V.

10. Regarding the annual report of the Chief Executive Officer that will be presented to the
General Ordinary Shareholders’ Meeting of Pinfra, S.A.B. de C.V. and that was
previously circulated to all the Government Bodies, I remark that it summarizes in a clear
and opportune manner what occurred during the period ended on December 31, 2014,
in all and each one of the sectors of Pinfra, S.A.B. de C.V.. In virtue of the above, the
report to be filed by the Chief Executive Officer, shows in a truthful and sufficient manner
the progress and results of the Company, as well as the main existing projects.

11. For all the above, in accordance to the evaluation made of the amounts issued by the
management, the internal audit reports and the audited financial statements, I may
conclude that the internal control system is operating in an advanced construction stage,
although there are still a few processes that must be completely developed before
entering a new consolidation stage, which is required to manage the new challenges and
risks of Pinfra, S.A.B. de C.V. reflected in the corresponding risks map.

Sincerely,
[Illegible signature]
CPC. Luis Javier Solloa Hernández
President of the Audit Committee of Pinfra, S.A.B. de C.V.
GA #100224v5